Does my child have to file a tax return?

Does My Child Have to File a Tax Return?

Think back to your first job.

Maybe it was babysitting, waiting tables, mowing lawns, or delivering newspapers before the sun came up. Back then, taxes probably weren’t even on your radar.

Fast forward to today, and now you’re the parent asking the question:
“Does my child need to file a tax return?”

The answer depends on how much your child earned and the type of income they received.

Let’s break it down.

When a Dependent Child Must File a Tax Return
If your child is claimed as a dependent on your tax return, they generally must file their own return if their income exceeds certain IRS thresholds.

These thresholds apply to three types of income situations.

1️⃣ Unearned Income (Investment Income)
If your child receives more than about $1,300 in unearned income, they typically must file a return.
Unearned income includes things like:
• Interest
• Dividends
• Investment income
• Certain trust distributions

2️⃣ Earned Income (Wages or Job Income)
If your child earns more than about $14,600 from working, they will usually need to file a tax return.
Earned income includes:
• W-2 wages
• Part-time jobs
• Summer jobs
• After-school employment

Many students working part-time jobs will fall below this threshold, meaning filing may not be required.

3️⃣ Total Income Test
Sometimes a child must file based on combined income.
If their total income exceeds the greater of:
• $1,300, or
• Earned income plus $450
they may be required to file a return.

Yes, it sounds complicated — so let’s look at some examples.

Example: College Student With Both Income Types
John is a 20-year-old full-time college student working part-time at the campus bookstore.
He earned: • $6,000 in wages
• $550 in interest income
John’s total income is $6,550, which exceeds the IRS combined income threshold.
Even though his wages alone are below the earned income limit, he still must file a tax return.

Example: Teen With Only Wages
Sally is 16 and works part-time at a coffee shop.
She earns $5,000 during the year and has no investment income.
Since her income is below the earned income filing threshold, she is not required to file a return.
However…
If taxes were withheld from her paycheck, she may want to file anyway to claim a refund.

Example: Child With Investment Income
Tim is 13 and received $1,500 in dividends and interest income from investments.
Since this exceeds the unearned income threshold, Tim must file a tax return.
However, there is an alternative.

Parents may be able to include certain investment income on their own return if it stays below a specific limit.

This option can simplify filing but may increase the parent’s tax liability, so it’s worth reviewing with a tax professional.

What If Your Child Is Self-Employed?
Things change if your child receives Form 1099 income instead of a W-2.
If their net earnings exceed $400, they must file a tax return because they owe self-employment tax (Social Security and Medicare).
This applies even if their income is below the normal filing thresholds.

Important Reminder
Even if your child isn’t required to file, it can still make sense to file a return if:
• Taxes were withheld from their paycheck
• They qualify for a refund
• They want to begin establishing tax records

Bottom Line
Determining whether your child must file a tax return depends on:
✔️ The type of income they received
✔️ How much they earned
✔️ Whether they are self-employed
✔️ Whether taxes were withheld

The rules can feel confusing, especially when earned and unearned income are mixed.
If you’re unsure whether your child needs to file, book a call with Lisa Brugman, EA & Associates, and we’ll walk through the situation together so nothing gets missed.