You can include them as dependents on your return assuming they qualify and not include their income on your tax return. They can then file their own returns and indicate that they can be claimed as dependents on someone else's return. They would include their income on their returns.
First here is reminder of the criteria to claim them as dependents.
-
The person can't be your qualifying child or the qualifying child of any other taxpayer.
-
The person either (a) must be related to you in one of the ways listed under Relatives who don't have to live with you , or (b) must live with you all year as a member of your household (and your relationship must not violate local law).
-
The person's gross income for the year must be less than $4,300.
-
You must provide more than half of the person's total support for the year.
Second they will probably be charged a "Kiddie tax" on the unearned income. They will get a reduced standard deduction meaning part of the unearned income will be taxed even if below the "typical" standard deduction for single taxpayers (12,400).
You will be able to compare overall taxes working each way (putting the income on your return vs their returns) to see which is more beneficial.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
