Does My Child Need to File a Tax Return This Year?

At some point, nearly every parent sees their dependent child shift from receiver of occasional financial gifts to a legitimate economic contributor. Maybe it’s when they receive their first W-2 or when they realize bigger and bigger trust distributions. Perhaps your enterprising youngster flipped an asset last year and you wonder what age capital gains taxes kick in. 

You’re in the right place. Here we’ll clarify all the questions you have, and a few that you’ll encounter as your dependent kids continue their journey toward more financial independence.

Key takeaways

• Age doesn’t decide filing requirements, income does. A child’s obligation to file depends on the type and amount of income: earned or unearned. Not how old they are. Wages, self-employment income, interest, dividends, and trust income all trigger different thresholds and rules.
  
• Unearned income can be complicate filings, but you can navigate your options with the right knowledge. Amounts, tax rates, and filing status options all materially affect outcomes. We cover them here.
  
• Filing is about more than compliance; it’s an opportunity. Even when not required to file, a child can unlock refunds, recover withholdings, and build financial literacy and confidence.

Is your child a dependent for tax filing purposes?

Before learning whether (and how) your child should file their taxes this year, check their eligibility against dependency requirements:

• Your relationship to them. They must be a son or daughter, a step child, or eligible foster child
• Their age. Dependents are under 19 or under 24 if a full-time student. Children of any age qualify if they’re totally disabled.
• Where they live. Their residence must be with you for more than half the year. Some exceptions apply such as for students attending school away from home.
• Their own support. They must have not provided more than half their own support throughout the year.
• Filing status. They can’t be a dependent of yours if they’re filing jointly with a spouse. 
• Citizenship or residency status. To be claimed as your dependent, a child must be a US citizen, resident alien, or a resident of Mexico or Canada.  Note that a child that doesn’t meet these criteria but has US-source income may still need to file their own tax return.

Do you need to file your child’s taxes if they earned income?

Short answer: maybe — and sometimes it’s worth doing so even if you don’t technically have to.

Let’s break it down.

What counts as earned income?

Earned income is for money your child actually worked for. This includes:

• Wages or salaries from a job
• Tips
• Self-employment income, like babysitting, dog walking, or moving laws.

If your child earned money this way, then you’ll usually be looking at a Form W-2 (from an employer) or 1099-NEC (for gig or freelance work).

When does your child have to file?

If the amount on this form is more than $15,750 in earned income for tax year 2025, or if your child’s earnings are over $400 in net self-employment income, then they need to file a tax return. 

This $400 rule surprises a lot of parents, and understandably so. Once self-employment crosses that threshold, Social Security and Medicare taxes come into play.

Forms to use to file a child’s taxes on 2025 earned income only

For W-2 work, you’ll use a Form 1040 for reporting wages, withholding, and your child’s refund. For any self-employment income you’ll use the Form 1040, a Schedule C, and also most likely the Schedule SE for self-employment tax purposes, since anything over $400 in this category triggers collection of Social Security/Medicare taxes.

Even if filing isn’t required, it might still be smart.

Here’s an easy thing to miss but deserves attention: filing voluntarily can put money back in your child’s pocket.

If federal income tax was withheld from your child’s paycheck, estimated payments were made, or refundable credits apply, filing a return may mean getting a refund. Every year, families leave money on the table simply because they assume ‘no requirement’ equates to ‘no benefit.’

Whether (and how) to file your child’s taxes if they only have unearned income

Unearned income is money your child didn’t earn by working. This includes income from:

• Interest and dividends
• Capital gains distributions
• Rent or royalties
• Certain scholarships not reported on a Form W-2 
• Unemployment income (in limited situations)
• Taxable Social Security benefits (in limited circumstances where a child has other income)
• Trust income

When does your child have to file based on unearned income?If your child’s total unearned income exceeds  $1,350 in 2025,  they must file a tax return. There is an exception if the child’s only income is Social Security income.

What if your child’s unearned income is much higher?

You may be required to pay tax on the child’s unearned income at the parent’s tax rate, under what’s commonly known as the kiddie tax. The instruction publication for Form 8615 provides guidance in this scenario, so you’re not in the dark. 

Can parents include a child’s unearned income on their own return?

In some cases, yes.

Parents can elect to include  interest, dividends, and capital gains income on their own return instead of filing a separate return for the child, as long as certain conditions are met. For tax year 2025, unearned income must be over $1,350 but not more than $13,500.

Starting in 2026, these limits will be indexed for inflation. Starting in 2025, the maximum is set at ten times the minimum. 

Other conditions apply, such as:

• No estimated tax payments were made
• No backup withholding applies

For many families, this option is appealing because it allows them to file one return instead of two, even though the total tax owed is usually the same. This option is available only when a child’s income source comes solely from unearned sources like interest, dividends, and capital gains. Parents who choose it will file Form 8814.

Forms to use to file a child’s taxes on 2025 unearned income only

If your child files their own return — or doesn’t qualify to have their income included on a parent’s return — they’ll typically file Form 1040.

Unearned income is often reported on Form 1099, which may come from:

• Banks
• Brokerage firms
• Trustees

In less common cases, unearned income may appear on Schedule K-1. If kiddie tax applies, Form 8615 will need to be filed with the tax return. 

Whether (and how) to file your child’s taxes if they have a mix of earned and unearned income 

This is where things can get tricky, and where many parents assume filing isn’t necessary when it actually is. 

If your dependent child is single, under the age of 65, and not blind, and any of the following are true, then they must file:

• Unearned income is more than $1,350
• Earned income is over $15,750
• Total unearned and earned income is more than $1,350, or earned income plus $450 (whichever is larger)

For parents the confusion usually comes from situations where both income types are relatively low — making it feel optional. This combination can still trigger a filing requirement. But once you’re in the know, the ‘this is complicated’ factor slips away.

Forms to use to file a child’s taxes on a mix of earned and unearned income

Mixed income sources are common, so you’re not alone, and it’s super manageable. Here’s what you typically need.

• Form 1040 for the child
• As-needed schedules:
  • Schedule C/SE for qualifying self-employment income
  • Schedule B for interest and dividends
  • Schedule D for capital gains
  • Schedule E for rental and royalty income 
  • Form 8615 if kiddie tax applies to your child’s situation

Get children familiar with tools and tax experts who can help

We know tax education wasn’t part of the school system (and it really should have been), but now you can help your child build that knowledge and set them up for future success.

With TurboTax, your dependent child has the opportunity to file their own taxes with step-by-step guidance, or work with a TurboTax expert who can file for them.

Learning how to handle income early is one of the most practical skills there is. We’re here to help you and your family get it right and keep every dollar you deserve.