Does My Child Need to File a Tax Return?

You’re preparing your return and have gone through all of your tax documents twice. However, you may still have documents remaining that have your kids’ names on it. What do you do? Let’s talk about these documents and then decide if your child must file a return.

First, let’s briefly go over the IRS requirements for the dependency status on your personal return for your child. The dependent child must either be: 

• Under the age of 19 as of December 31st.
• A full-time student under the age of 24 as of December 31. Note: Your child must be a full-time student for at least 5 months of the year to qualify.
• A child of any age who is permanently and totally disabled at any time during the year.

The dependent should also:

• Live with you for more than half of the year.  Note: If your child is a college student (in state or in another state), they are still considered to be living with you for the entire year.
• Be a U.S. Citizen, U.S. Resident, U.S. National, or a resident of Canada or Mexico. 
• Not provide more than half of their own support.
• Not file jointly with their spouse.
• Not be claimed as a dependent on another tax return. 

Only Earned Income

If your child only has earned income reported on a W-2 and the total isn’t more than $14,600 in 2024 ($13,850 for 2023), then a return does not need to be filed for 2024.  However, you’ll want to file a return for a refund if there are any federal or state withholdings. Review your child’s Form W-2, specifically boxes 2 and 17. These boxes will show you if your child had any federal income taxes withheld or any state income taxes withheld.  If there are amounts in these boxes, your child can file a tax return to get a refund for the taxes withheld. If the total of earned income is over $14,600 for 2024 (or $13,850 for 2023), a return must be filed.

Earned income includes wages and salaries on Forms W-2. It also includes income earned as an independent contractor.  This type of income is typically reported on Form 1099-NEC or possibly on Form 1099-MISC.  Income from these forms will be reported on Schedule C as self-employed income. If your child’s net income (gross income less expenses) is at least $450 for 2024 ($400 for 2023), then your child will be required to file a tax return. The overall net income is included as earnings and flows into Form 1040. See more below about self-employment income. 

Only Unearned Income

What if your child has no earned income (W-2 or self-employment) but does have unearned income (also known as investment income)? The answer depends on how much unearned income there is for the tax year.

To find the child’s unearned income, look for Forms 1099-INT, 1099-DIV, and 1099-B with the child’s Social Security number.

Unearned income includes taxable interest, dividends, capital gains (including capital gain distributions), and distributions from trusts.

The child’s tax return only needs to be filed if the total unearned income is more than $1,300 in 2024 ($1,250 in 2023).

There is another option if your child is in this situation – the child’s parents may be able to elect to have the child’s income included on their tax return. If the parents make this election, the child does not have to file. Your child’s unearned income would be reported on Form 8814, Parents’ Election To Report Child’s Interest and Dividends. The amount from this form will flow into the parent’s tax return.

A Mix of Earned Income and Unearned Income

This is where it gets complicated. If the child received any 1099-INT, 1099-DIV, or 1099-B tax documents in addition to those W-2s or 1099-NEC forms, then unearned income was also received. In this situation, your child would need to file their own 2024 income tax return if their earned income is over $14,600 ($13,450 for 2023) or the lesser of their earned income amount plus $450 ($400 for 2023).  

Other reasons for a child to file a tax return

A child must file a return if they owe other taxes other than regular income tax. Here’s a list of those types of taxes:

• Self-employment tax (if your child had self-employment net earning of more than $450 in 2024 or $400 in 2023)
• Social Security and Medicare tax on tips not reported to employer
• Recapture of an education credit

When it’s time to file, TurboTax is here to help you, no matter your tax situation. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.