Unlike other taxpayers, the IRS treats your child differently depending on whether they earn money from work or through investments. All dependent children who earn more than $6,300 of income in 2016 must file a personal income tax return and might owe tax to the IRS. Earned income only applies to wages and salaries your child receives as a result of providing services to an employer, even if only through a part-time job.
However, even if your child earns less than $6,300 during 2016, it may be a good idea to file a tax return for them, because they could be eligible for a tax refund. Regardless of the amount of income your child earns, their standard deduction is different than yours. It can never exceed the larger of $1,050 or their earned income plus $350, with the maximum equal to $6,300.
