When can a minor claim exempt on a W-4?

[russell450]

The absolute maximum earned wages I expect is $15,000. I've already paid about $260 in federal income tax, and according to the IRS withholdings calculator, I would only need to pay $21 when I file my taxes if I claimed exempt now. However, I doubt I will make that much. My parents can and will claim me as a dependent and I expect no other income in 2019.

[Carl]

If you are a minor, your parents will qualify to claim you as a dependent regardless of your earnings. If under the age of 19 on Dec 31 of the tax year, you could earn a million dollars and still qualify as their dependent. Note the key word here is "QUALIFY". It doesn't matter if they actually claim you or not. Basically, if *you* do not provide more than half of your own support for the entire year, then your parents qualify to claim you. Period. (There's other criteria too. But I assume you actually live with your parents.)
If you will earn less than $12K of W-2 income from all sources for the entire tax year, then filing exempt shouldn't be an issue. However, if you earn more than that having filed exempt, not only will you pay the taxes you owe on the amount that exceeds $12K, you will also pay a fine for having claimed exempt when you did not qualify to do so.
Also understand that you are still required to pay Medicare and Social Security. You're not exempt from that.
Now if self-emploiyed and you earn more than $400 through self-employment, then you are required to file a tax return and you will pay the self-employment tax at 15.3% on the amount of SE income that exceeds $400, no matter what.
So you might want to reconsider filing as exempt, because if you earn more than $12K of W-2 income or more than $400 of SE income, it's gonna cost you.

[russell450]

I’ve earned and paid income tax on $4000 so far. If I make slightly more than $12,000 but still don’t owe more income tax than what I’ve already paid (or still overpaid tax), will I still have to pay a fine?

[Opus 17 · Accepted solution]

Basically, never claim exempt on your W-4.  The withholding system is set up so that, if you earn under the amount to owe tax, no federal tax will be taken out of your pay, and if you start to earn over the limit, the appropriate tax will be withheld.  In other words, it's self-adjusting.  Claim the correct number of allowances per the worksheet.

At $15,000 of gross income, your taxable income will be $3000 and your income tax owed is $300, assuming this is all from W-2 employment and not self-employment, and assuming nothing else changes in your tax situation.  You could claim exempt once you reach this amount -- the IRS will not penalize you as long as the amount of money you pay into the system is equal or more than what you end up owing.  But be careful; if your situation changes (you start working more hours, you get married, you start a side-job or take a second part-time W-2 job) and you don't adjust your W-4, you could end up with a surprise tax bill.

Withholding limits, exemption amounts, and tax percentages may be completely different for your state income tax.  Claiming exempt on your W-4 may also make you exempt from state withholding (unless you file a separate state withholding form claiming something different) and that might be the wrong answer even at that low of income.

[Anonymous]

i don't know where you got the $21  from but if you earn $15,000, $3,000 would be taxable and the tax on that is about $280 in 2019.

also based on 2018 2210  if your tax   for the year is less than $1,000 you will not owe an underpayment penalty. (instructions on line 4) 

[russell450]

The $21 is the difference of what I owe and what has already been withheld (for some reason, the IRS withholdings calculator added an extra dollar): 300-260= $20 due

[SweetieJean]

State taxes may be different.