Can you please clarify if I have to report Dependent income on Parent's form 8962 Line 2B if the Dependent earns over $400 in Self Employed Income but still does not meet the Federal Income (single) threshold of $12,550 ? If she earns more than $400 for dog or baby sitting, it's considered Self Employment income and my understanding is she is therefore REQUIRED to file a federal income tax return.
I believe the Turbotax 2021 Help prompt indicated I needed to report dependend income on 8962 Line 2b IF THE DEPENDENT IS REQUIRED TO FILE A FEDERAL INCOME TAX RETURN". In other words, any event that would "trigger" a requirement to file, even if the $12,550 income threshold was not met, would require reporting dependent income on Parents 8962.
Form 8962 Line 2B instructions state (partial quote):
"Enter on line 2b the combined modified AGI for your dedpendents who are required to file an income tax return because their income meets the income tax return filing threshold. Do not include the modified AGI of dependents who are filing a tax return only to claim a refund of tax withheld or estimated taxes"
I cannot get access the turbotax help question anymore to confirm the turbotax question was worded the way I stated since I already filed for 2021 but I am trying to plan for 2022 taxes.
