When Does Your Child Have to File a Tax Return?

Learn the rules about when a child must file a tax return because of earned and unearned income.

By , J.D.

Sometimes, one or more of your children must file their own tax returns even though they're still your dependents for tax purposes. Generally, a child is responsible for filing a tax return and paying any tax, penalties, or interest on that return. But if your child doesn't pay the tax due on this income, you (the child's parents) might be liable for the tax. Moreover, if a child can't file a return for any reason, such as age, the child's parent or guardian is responsible for filing a return on the child's behalf.

Types of Income

Whether your child is required to file a tax return depends on the applicable standard deduction and how much earned and unearned income the child had during the year. "Earned income" is income a child earns from working. "Unearned income" is income earned from investments.

Earned Income Only

A child who has only earned income must file a return only if the total is more than the standard deduction for the year. For 2021, the standard deduction for a dependent child is total earned income plus $350, up to a maximum of $12,550. So, a child can earn up to $12,550 without paying income tax. For 2022, the standard deduction for a dependent child is total earned income plus $400, up to $12,950.

Unearned Income Only

A child who has only unearned income must file a return if the total is more than $1,100.

However, if your child's interest and dividend income (including capital gain distributions) total less than $11,000, you can elect to include that income on your (the parents') return rather than file a return for the child. In this event, all the income is taxed at your tax rates—you could end up paying more with this method.

Earned and Unearned Income

If a child has both earned and unearned income, that child must file a return for 2021 if:

  • unearned income is over $1,100
  • earned income is over $12,550, or
  • earned and unearned income together totals more than the larger of (1) $1,100, or (2) total earned income (up to $12,200) plus $350.

Should a Return Be Filed Even If Not Required?

Even if your child doesn't meet any of the filing requirements discussed, that child should file a tax return if (1) income tax was withheld from that child's income, or (2) that child qualifies for the earned income credit, additional child tax credit, health coverage tax credit, refundable credit for prior year minimum tax, first-time home buyer credit, adoption credit, or refundable American opportunity education credit. See the tax return instructions to find out who qualifies for these credits. By filing a return, your child can get a refund.

What Is a Child's Income Tax Rate?

Income tax on unearned income up to an annual threshold is paid at the child's tax rate, which is ordinarily lower than the parent's. Income over the annual threshold must be paid at the parent's maximum tax income tax rate. The threshold is currently $1,100. Figuring the kiddie tax can be complex. For example, if a parent has more than one child subject to the kiddie tax, the net unearned income of all the children has to be combined, and a single kiddie tax calculated.

For federal income tax purposes, the income a child receives for personal services (labor) is the child's, even if, under state law, the parent is entitled to and receives that income. So, dependent children pay income tax on their earned income at their own individual tax rates.

For more on tax rules for children, see IRS Publication 929, Tax Rules for Children and Dependents.

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