Your child has started earning their own money, but you’re still claiming them as a dependent. How will this situation affect your taxes?
One of the most common tax questions parents have is if they should report their dependent child’s W-2 on their tax return or if the child should file their own return. Here’s what you need to know before you file.
Should my child file their own tax return?
You cannot report your child’s Form W-2 on your tax return. If your child has earned income during the tax year, they must file a separate return to either receive a tax refund or pay any balance owed to the IRS.
However, even if your child must file separately, you can still claim them as a dependent on your taxes if they meet the criteria of a qualifying child. When you file a separate return for your child, you will just have to indicate that they can be claimed as a dependent on someone else’s return (AKA your return).
How do I know if my child qualifies as a dependent?
For your child to qualify as a dependent, they must meet the following requirements:
- They must be your child, stepchild, foster child, sibling, half-sibling, stepsibling, or a descendant of any of them (your niece or nephew, for example).
- They must be under 19 years old (or under 24 years old if they are a full-time student). If they were permanently disabled at any time during the year, there is no age threshold.
- They must have lived with you for more than half of the year. Exceptions include the child being temporarily away at college, in the hospital, or juvenile detention.
- They must not provide more than half of their own financial support during the year.
- They must be younger than you unless they are disabled.
- They must be a U.S. citizen, U.S. national, resident alien, or a resident of Canada or Mexico.
- The child must not be claimed as a dependent by someone else.
Can I claim my child’s investment income on my tax return?
Parents can sometimes claim their child’s investment income on their tax return.
If your dependent child has income such as dividends or interest, the IRS considers this “unearned income.” You can typically choose to report your child’s unearned income on your return or your child’s return. However, if your child’s interest or dividend income totals $11,000 or more, it must be reported separately on your child’s own return.
Remember, if your child has earned income, they will still need to file a separate return even if you’re reporting the child’s investment income on your return. If the child doesn’t have any earned income and you include their unearned income on your return, the child will not have to file a return.
For more answers to common tax questions, check out our interactive Q&A.
This article is for informational purposes only and not legal or financial advice.
FAQs
You cannot report your child's Form W-2 on your tax return. If your child has earned income during the tax year, they must file a separate return to either receive a tax refund or pay any balance owed to the IRS.
Do I need to include my child's W-2 on my tax return? ›
You cannot report your child's Form W-2 on your tax return. If your child has earned income during the tax year, they must file a separate return to either receive a tax refund or pay any balance owed to the IRS.
Can you report child's income on parent's return? ›
To claim a child's income on a parent's tax return, the child needs to be considered a qualifying child dependent of the parent. Parents can use IRS Form 8814 to elect to report their child's income on their tax return instead of the child filing their own return.
Can I still claim my child as a dependent if they work? ›
Here's the short answer: The Internal Revenue Service (IRS) will usually let you claim your child if they work or earn an income, no matter the dependent's income source, if certain requirements are met.
Can I claim my daughter as a dependent if she made over $4000? ›
Your relative can't have a gross income of more than $4,700 in 2023 and be claimed by you as a dependent. This threshold increases to $5,050 for 2024.
Do I need to claim my child's income on my tax return? ›
Even if your kids are young enough to be your dependents, they may still 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. The need to file depends on both the amount and source of the minor's income.
Can I add my child's W-2 to my tax return TurboTax? ›
You don't—your dependent's W-2 isn't reported on your return. If your unmarried dependent's W-2 earnings exceed their Standard Deduction ($13,850 in 2023), they should file their own return and report the W-2 on their return.
Can I claim my child as a dependent if she files a return? ›
Can I claim my child as a dependent if they file a tax return? Your child can still qualify as a dependent if they file their own taxes. They will need to indicate that someone else claims them as a dependent on their return.
Can I claim my child as a dependent if they are over 18? ›
Yes, your parents can claim you as a dependent after the age of 18 indefinitely as long as you meet the qualifying household and financial support requirements.
When should I stop claiming my child as a dependent? ›
To meet the qualifying child test, your child must be younger than you or your spouse if filing jointly and either younger than 19 years old or be a "student" younger than 24 years old as of the end of the calendar year.
Gross income is the total of your unearned and earned income. If your gross income was $4,700 or more, you usually can't be claimed as a dependent unless you are a qualifying child. For details, see Dependents.
Can I claim my son as a dependent if he works and in college? ›
If you're still interested in claiming dependents, but your child doesn't meet these tests, your college student can still be your dependent if: You provide more than half of the child's support. The child's gross income (income that's not exempt from tax) is less than $4,700 in 2023.
Can I file my own taxes if my parents claim me? ›
If your dependent is claimed on your tax return, they may still be required to file an income tax return of their own. The requirements vary by filing status and age. The current tax year minimum income requirements for dependents are listed in the table below.
What are the disadvantages of claiming a parent as dependent? ›
Cons of claiming your parents as dependents
While tax credits and deductions can help you reduce your taxable income, you still have to pay a significant amount in care costs. The tax benefits you receive from claiming your parents as dependents will only partially offset medical expenses and other care costs.
Can I claim my 30 year old son as a dependent? ›
There is no age limit for how long you can claim adult children or other relatives as dependents, but they must meet other IRS requirements to continue to qualify. Additionally, once they are over 18 and no longer a student, they can only qualify as an "other dependent," not a qualifying child.
Can I claim my child as a dependent if they receive social security? ›
Also, your child's Social Security benefits might be a factor if you can claim her as a dependent. For the support test, the Social Security benefits your child spends on her own support are considered provided by her. This is regardless of whether the benefits are taxable.
What happens if I don't add a W-2 to my taxes? ›
What happens if I already filed my taxes and got another W2? If you forget to include a W-2 when you file your taxes, the IRS will catch it and send you a bill for the taxes you owe. You may also be subject to penalties and interest charges.
Do I have to give my child a W-2? ›
As a rule of thumb, you should issue a W-2 to anyone who works for your business and is classified as an employee. This includes your child. If your child is over 18 and you've decided to treat them like an independent contractor for tax purposes, you'll need to give them a 1099-NEC (if you've paid them $600 or more).
Do I have to include all w2s on my tax return? ›
You must include all income and withholding from all Forms W-2 you receive on your tax return, and if filing jointly, you must also include all income and withholding from your spouse's Forms W-2. Attach a copy of each Form W-2 to the front of your tax return as indicated in the instructions.
Do I have to put my kids on w4? ›
Generally, it's best to allow for child-related tax credits on the Form W-4 of the highest paying job. If you and your spouse each allow for child-related tax credits on your W-4, it will likely result in not enough withholding, and having to pay an additional amount to the IRS at the end of the year.
