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When Should My Child File a Tax Return?

Child Dependent filing a tax return.

March 1, 2023

Do you have a teen that has joined the work force? Maybe they’ve received a Form 1099. When do you stop claiming them as a dependent? You may have some questions about what exactly you should do when their first W-2 or other tax documents start arriving. 
When does your child stop qualifying as your dependent? 
A child is considered your dependent if they live within your home for more than half of the year, provide less than half of their financial support and are under age 19 at all times during the tax year. There is an exception to for full-time students; they must be under the age of 24, and do not have to live with you during the year. 
When does your child need to file a federal tax return? 
A single dependent must file a federal tax return if their 2022 W-2(s) total more than $12,950. (Please note that state levels may vary for any of the situations described below.) 
They are also required to file a tax return if they have 2022 unearned income totaling more than $1,150. Unearned income is income from interest, sale of stock, or any other situation where money is received without actively working for it. 
In instances where they have earned and unearned income, it becomes slightly less straightforward. In these cases, the income filing thresholds are lower.  A return must be filed if the gross income is more than the larger of $1,150 or earned income (up to $12,550) plus $400. 
Other tax situations may apply to your child, as well. A tax return is required to be filed if any of these situations apply: 
  • Self-employment earnings of at least $400. 
  • Your child makes a deductible IRA contribution with their earned income. 
  • Social Security or Medicare tax is owed on tips that weren’t reported to an employer, or the employer didn’t already deduct from the pay. 
If your child has $2,300 or above in investment income, they may be subject to the rules of the Kiddie Tax Reform Act of 1986. Please consult your tax advisor for information about your specific tax situation if you believe this may apply to you. 
A child who is not claimed as a dependent must file if their taxable income is above $12,950 from any source. 
Should your child file even if they’re not required to? 
Even if your child is not required to file a tax return, there are several situations where it may be advantageous for them to do so. They may qualify for a refund if income tax was withheld from their pay. 
If you still have questions about your child’s need to file, the IRS has a helpful interview tool to help you determine if it is necessary. The calculation tool can be found https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return

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