Q. My question is what is going on here? Does she need to pay those federal taxes or is it only if she makes above 6500?
A. All that is correct and absolutely normal. FICA (social security and Medicare) tax is taken out at the very first dollar of income. Although she will not have to pay any income tax if her wages, for the year, are under $14,600, it is not unusual for an employer to have withheld a little bit of federal income tax. She can get the $5 back (but not the "300 or so in social security") by filing a federal income tax return. She should qualify for the TurboTax free version. She is not required to file a federal return.*
*You do not report her income on your return. If it has to be reported, at all, it goes on her own return. A dependent must file a tax return for 2024 if he had any of the following:
- 1. Total income (wages, salaries, taxable scholarship etc.) of more than $14,600 ($13,850 for2023).
- Unearned income (interest, dividends, capital gains, unemployment, taxable portion of 529 distribution) of more than $1300 ($1250 for 2023).
- Unearned income over $450 and gross income of more than $1300.
- Household employee income (e.g. baby sitting, lawn mowing) over $2600 ($14,600 if under age 18)
- Other self employment income over $432, including money on a form 1099-NEC
Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.
In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.
If your daughter can not be dependent, then the filing requirement is $14,600 regardless of the source of the income.
