At What Income Does a Minor Have to File an Income Tax Return?
Discover if your child needs to file taxes this year. Learn how to determine if their income requires a separate return or can be included in yours, based on detailed IRS guidelines.
Key Takeaways
- A minor who may be claimed as a dependent, needs to file a return if their income exceeds their Standard Deduction.
- A minor who earns less than $14,600 in 2024 will usually not owe taxes but may choose to file a return to receive a refund of tax withheld from their earnings.
- A child who earns $1,300 or more (tax year 2024) in "unearned income,” such as dividends or interest, needs to file a tax return.
- A minor who makes more than $400 (tax year 2024) in self-employment income will typically have to pay Social Security or Medicare taxes, regardless of their total earnings.
How do I know if my minor child has to file an income tax return?
Youngsters are especially ambitious these days, and even if your kids are young enough to be your dependents, they may have to pay taxes. In some cases, you may be able to include their income on your tax return; in others, they'll have to file their own tax return. Whether or not minor children need to file an income tax return depends on many factors such as earned income from a job including self-employment, unearned income typically from investments, or the need to claim a refund.
At what earned income does my child have to file taxes?
A minor who may be claimed as a dependent has to file a return once their income exceeds their Standard Deduction. For tax year 2024 this is the greater of $1,300 or the amount of earned income plus $450 up to the full Standard Deduction of $14,600.
As an example, a 15-year-old who works after school and earns less than $14,600 in 2024 would owe nothing in taxes. Even so, if an employer withheld taxes from her paycheck, she'll have to file a tax return to obtain a refund.
How does unearned income impact a minor’s income tax requirements?
The IRS also has a cutoff level for "unearned income," such as dividends or interest. If your child's income is above this year's level, they need to file; below that point, they aren't required to file a tax return. The amount for 2024 is $1,300.
If the child has both earned and unearned income, both amounts must be added together to determine if the total income triggers the mandatory filing requirement. See IRS Publication 501 for help figuring this out.
TurboTax Tip:
“When a child is required to file a tax return and has unearned income above a yearly adjusted minimum threshold, Form 8615 may be required to calculate the child’s tax on unearned income above the threshold using their parents’ marginal income tax rate.” – Kelly Wallace, CPA, Homedale, Idaho
Does a minor have to pay Social Security or Medicare taxes?
Even if a minor's income is less than the minimum threshold, the IRS sets other conditions that may require a tax return to be filed. A minor must file, for example, if a minor owes Social Security or Medicare taxes on tip income.
Does a minor have to pay self-employment taxes?
In addition, a minor with income from self-employment may owe Self-Employment Tax, which means paying both the employee’s and employer's share of Social Security and Medicaid taxes. The income trigger for owing tax for self-employment is $400 in 2024.
Should a minor file a return if their income is below the filing requirement?
It may seem like an unnecessary hassle to file a tax return if they don’t meet the filing income requirements, but there are a few good reasons to file anyway, including:
- They had income tax withheld from their paycheck.
- They may be eligible for a refund.
A tax expert can evaluate your child’s tax situation to help you determine whether they should still file.
Can I claim unearned income on my child’s behalf?
If your child is required to file a tax return for unearned income, the IRS gives you the option of claiming the money on your return instead. There are certain restrictions, including a limit to the amount of money involved, and the tax you’ll owe may be greater than if your child filed an individual return. If you qualify, file Form 8814 with your 1040 and the IRS will not require your child to file.
Can my child still file a tax return if I claim them?
Yes, if you claim your child as a dependent, they can still file their own income tax return. It’s important to note that if your child is filing their own tax return, you will not include their income on yours.
Even if your child is earning and reporting their own income, you can claim them as a dependent as long as they meet the IRS’s qualifying child test. If you want to do so, you may want to review the rules around claiming a dependent on your tax return.
Can I handle IRS correspondence on behalf of my child?
Generally, a child is responsible for filling out their own tax return, but there are reasons that a parent may need to be involved in the filing process.
If, for any reason, your child can’t sign their own return, you will need to sign it for them and include the verbiage, “By (signature), parent (or guardian) for minor child.”
If they file and sign themselves, but you want to assist in any matters regarding their tax liability, penalties, or other correspondence, you’ll need to take an extra step when filing the return. When filling out the tax return, you or your child–whoever is filling it out–should check the “Yes” box in the Third Party Designee section and list the name of who is authorized to discuss matters regarding their tax return.
If you receive correspondence from the IRS regarding their tax return, you should contact the IRS to let them know that the matter involves a child.
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