Yes, the third bullet applies to your son. Because he has both earned and unearned income and it's over $1,100 he is required to file a tax return. His standard deduction will be limited.
For 2021, the standard deduction for dependents is limited to the greater of $1,100 or your earned income plus $350 (but the total can't be more than the normal standard deduction available for your filing status). For 2022, the limit is $1,150 or your earned income plus $400, whichever is greater.
- His standard deduction will be a total of $3,413 ($3,063 +$350). This translates into taxable income of $491. This is the reason he must file.
- He is not required to file Form 8615 (see instructions).
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