Can my teenage son (soon to turn 17) claim "exempt" on his W4? When looking at the FAQ from the IRS, it seems like the answer to this question is a fairly straightforward "yes" (he didn't work last year, and I doubt he'll earn more than $10k this year). However, something is nagging in my head telling me it's not that simple. Am I worrying about nothing, or is there some factor I'm overlooking?
Follow the guidelines from the IRS. It is very straight forward.
The purpose of exempt is to make it more likely that somebody who in not going to have to pay doesn't have to file to get their withheld money back.
If the situation changes because they work more hours, or they get a big raise just submit a new W-4. The biggest risk is that they go over the limit, but the safe harbor rules will protect them. The general rule is that if you have withheld 100% of the previous years tax you are protected. 100% of $0 is still $0.
Employers are supposed to re-verify each year that a person is still exempt.