Should A Dependent File a Tax Return?

Qualifying Children typically include your biological, adopted, or stepchildren. They must meet the following criteria:

• Age: Under 19 years old, or 24 if enrolled in a full-time educational program.
• Relationship: Your child, stepchild, sibling, or a descendant of any of these.
• Residency: Living with you for more than half the year.
• Support: You must provide more than half of their financial support.

Important Note: If you're under 16 and haven’t filed a tax return before, you can’t e-file your first tax return. You can still prepare your return on eFile.com, then print and mail it to the IRS. Next year, you'll be able to e-file your return. If you’re a dependent, your return is usually free on eFile.com. If it's not, reach out to us for a promo code. See, instructions on printing and mailing your tax return.

Qualifying relatives can be anyone who lives with you and depends on you for financial support. They don't need to be related to you by blood or marriage. However, they must meet these requirements:

• Income: Their income must be below the IRS-specified limit for the year.
• Support: You must provide more than half of their financial support.
• Not a Qualifying Child: They cannot be claimed as a qualifying child by someone else.

Dependents may need to file a tax return if they have certain types of income. Here’s a closer look at what counts as taxable income:

Earned Income: This includes wages, salaries, tips, and other compensation received for work performed. It also covers taxable scholarship and fellowship grants. For example, if a student has a part-time job or an internship, their earnings are considered earned income. This income must be reported and can be found on various forms like W-2s or 1099s.

Unearned Income: This refers to income that is not earned through work. Examples include taxable interest, capital gains, ordinary dividends, unemployment compensation, taxable Social Security benefits, pensions, annuities, and income from trusts. Unlike earned income, unearned income can sometimes be less straightforward, as not all unearned income is taxable.

A dependent might need to file a tax return based on the amount and type of income they receive. Here are the key filing requirements:

A. Standard Deduction Limits: If you are a dependent and filing your own tax return, your standard deduction cannot exceed the greater of $1,300 or the sum of $450 plus your earned income. However, this total cannot exceed the regular standard deduction amount that applies to single filers.

B. Age and Filing: If you are under age 16 and filing a tax return for the first time, you cannot e-file it. You will need to prepare your return on a tax preparation site like eFile.com, print it out, and mail it to the IRS. After your first year, you can e-file your returns, and in most cases, eFile.com will allow you to file for free. If you encounter any issues or need a promo code for a free return, reach out to us.

C. Income Requirements for Filing: Generally, a dependent should file a tax return if:

1. They had any taxes withheld from their pay, regardless of their total income.
2. Their earned income exceeds the standard deduction amount.
3. They earned at least $400 from self-employment or freelance work.

A dependent must file a tax return if they meet any of the following criteria for the 2024 tax year:

• A. Earned Income: Their earned income exceeds the standard deduction for dependents, which is $1,300. This includes wages, tips, and other forms of compensation for work performed.
• B. Unearned Income: Their unearned income exceeds $1,300. This includes interest, dividends, and other types of income that are not earned through work.
• C. Combined Income: Their combined earned and unearned income exceeds the combined threshold, which is $1,300 + $1,300 = $2,600 for the 2024 tax year.

Additional Considerations:

• If a dependent is claimed as a qualifying child on another person's tax return, they generally do not need to file their own tax return, even if their income exceeds the filing thresholds.
• If a dependent is claimed as a qualifying relative on another person's tax return, they may still need to file their own tax return if their income exceeds the filing thresholds.
• If a dependent has any other tax obligations, such as self-employment income or investment income, they may need to file a tax return regardless of their income level.

The filing requirements for dependents vary based on their income and filing status.

• A. Earned Income: If a dependent’s earned income exceeds the standard deduction for a single filer, they need to file a tax return.
• B. Investment Income: If a dependent’s investment income exceeds the unearned income limits described on this page, they must file a tax return. This includes income from interest, dividends, and other investments.
• C. Self-Employment Income: Regardless of age, if a dependent earns at least $400 from self-employment or freelance work, they must file a return. This rule applies to all tax years.
• Married Dependents: If a married dependent’s spouse files a separate return and itemizes deductions, the dependent must also file a separate return if their total income is $5 or more.
• Even if a dependent’s income does not reach these thresholds, it’s often advisable to file a return if any taxes were withheld.

To ensure a smooth filing process, gather the following documents:

• W-2 Forms: If you were employed, obtain your W-2 form, which details your earnings and taxes withheld.
• 1099 Forms: For other income sources, such as freelance work or investments, collect the appropriate 1099 forms.
• Documentation of Other Income: Provide proof of any additional income, including rental income or royalties.
• Deduction Receipts: Maintain receipts for deductible expenses, such as medical costs or charitable donations.
• Personal Information: Have your Social Security number and those of any dependents ready. Additionally, provide your bank account information if you anticipate a refund.

If your dependent child earns money through work, that income must be reported on their own tax return. This is true even if local laws give parents the right to claim or receive that income.

Important Note: You should not include your dependent's income on your tax return. Your dependent must file their own tax return and indicate that they can be claimed as a dependent on someone else’s return. If this box isn’t checked, it could lead to issues with your e-filed return being rejected by the IRS.

Income Limits for Dependents:

• A qualifying child dependent can earn any amount; there are no income limits for them.
• A qualifying relative, however, can earn up to $5,200 in 2025, up from $5,050 in 2024 before it affects their dependency status.

Even if your dependent doesn’t earn any income, there are still scenarios where they might need to file a tax return. For example, if they purchased health insurance through the Marketplace, they need to file a return to claim the Premium Tax Credit.

Your dependent can also choose to file a return even if it’s not required, especially if they might be eligible for a tax refund. To find out if they might get a refund, they can use a tax refund calculator by entering their details (such as income, taxes withheld, and any credits). Alternatively, they can start preparing their tax return to see if they qualify for a refund.

If your dependent is a student, they might need to file a return if they meet the IRS filing requirements. Even if they are not required to file, they might want to do so to claim refundable tax credits like the American Opportunity Credit. If they don’t file, you can claim this credit on your own return by reporting their 1098-T.

If your dependent is under 16 and filing a tax return for the first time, they cannot e-file. They can still prepare their return, print it, and mail it to the IRS. Next year, they will be able to e-file their return.

If your dependent must file but cannot due to age or another reason, you, as their guardian, will need to file on their behalf. You must sign the return on their behalf, noting "By [your signature], parent for minor child." If there are any taxes owed, you are responsible for paying them.

You may be able to include your dependent child's dividend and interest income on your tax return. If you report this income on your return, your child will not have to file their own tax return. All of the following conditions must be met before you can claim your child's interest and dividend income on your return:

• Your child is under age 19 (or under age 24 if he or she is a student) at the end of the tax year.
• Your child's gross income is only from dividends and interest (including capital gain distributions and Alaska Permanent Fund dividends).
  • The dividend and interest income was less than $12,500.
• Your child is required to file a tax return unless you meet the requirements to file your own return with your child's income.
• Your child does not file a joint tax return.
• No estimated tax payments were submitted for the current tax year and no overpayments for the previous tax year were applied for the current tax year under your child's name and Social Security number.
• You must be the parent whose tax return is used when reporting your child's income.
• No federal backup withholding tax was withheld from your child's income.

Usually, backup withholding applies to most types of payments reported on Form 1099. These payments include:

• Interest payments (reported on Form 1099-INT)
• Dividends (reported on Form 1099-DIV)
• Patronage dividends (reported on Form 1099-PATR, but only if at least half the payment is in money)
• Rents, profits, or other gains (reported on Form 1099-MISC)
• Commissions, fees, or other payment for independent contractor work (reported on 1099-MISC)
• Payments by brokers (reported on Form 1099-B)
• Payments by fishing boat operators (reported on Form 1099-MISC, but only the money part and it should represent a share of the proceeds of the catch)
• Royalty payments (reported on Form 1099-MISC)
• Gambling winnings (reported on Form W-2G).

Backup withholding generally does not apply to other payments reported on Form 1099-MISC (other than royalty payments and payments by fishing boat operators) unless at least one of the following four situations applies:

• The amount received from any payer is $600 or more.
• The payer had to give you a Form 1099 for the previous tax year.
• The payer made payments to you last year that were subject to backup withholding.
• The amount is less than $10 (neither a Form 1099 nor backup withholding is required).

To determine if a young child or relative should file their own tax return or be included in your return, follow these steps:

1. Use the FILEucator Tool: Start by using the FILEucator tool to assess whether the dependent needs to file a return on their own or if it should be included with your return.
2. Check Dependency Status with DEPENDucator: Next, use the DEPENDucator tool to find out if you can claim the child or relative as a dependent on your tax return.
3. Review Results and IRS Guidelines: Combine the results from both tools and review the IRS filing requirements to decide the best approach based on your specific situation.
4. Prepare and E-file the Return: If the dependent needs to file their own return, they can prepare and e-file it on eFile.com. The platform will guide them through the process by determining the correct forms based on their answers to simple tax questions. Before e-filing, the return will be checked for accuracy and completeness.

As a student with part-time work, you might need to file a tax return depending on how much you earned. The filing requirement depends on your income level and whether you’re claimed as a dependent on someone else’s return. If your part-time job earned you more than the IRS threshold for your filing status, you'll need to file.

Even if you don’t need to file, doing so could be beneficial. You might be eligible for tax credits or refunds if you had taxes withheld. It’s a good idea to review your income and see if filing makes sense for you.

Yes, you can definitely file a return even if no taxes were withheld from your paycheck. Filing a tax return is about reporting your income to the IRS, and it’s not solely dependent on whether taxes were taken out of your pay.

In fact, filing a return can be beneficial if you’re eligible for tax credits or if you had a small amount of tax withheld and want to claim a refund. So, even if you think you don't owe anything, filing a return could still work in your favor!