Hello,
My 19 year old daughter (full time student) received a 1099-DIV of $672.00 and also had earned income (W-2) of $4473.00. My understanding is that she would be required to file a tax return because the sum of her earned income plus $400 is less than the amount of her combined unearned and earned income. Is this correct?
I'd also like to verify that my other child, who also received a 1099-DIV in the same amount but with no earned income, would not have to file a return and I would not be required to include this income in my own return.
Thanks in advance for your guidance!
Yes. Your 19-year-old would have to file a return because her income ($4,473 + $672) is larger than her standard deduction ($4,473 + $400).
Refer to Table 8.Standard Deduction Worksheet for Dependents.
You can also use the IRS interactive filing assistant: Do I Need to File a Tax Return?
No, your dependents are not required to file a return. One has Unearned Income under $1,150, and the Standard Deduction for the other is the larger of $1,150 or their Earned Income + $400.
However, if they have Earned Income they may want to file (indicating they are a dependent) if they paid Federal Tax on their wages.
Here's the Filing Requirements for Dependents for 2022.
Thanks for your reply. Turbotax states that if a child had unearned income of more than $400 and a gross income of more than $1150, they are required to file a return...I'm so confused.
If she files a return, she does get a modest refund but we pay hundreds more in tax, since if she files a return we have to include her income in our household income when determining the allowable Advanced Premium Tax Credit for our health insurance.
Please advise! thanks
Yes. Your 19-year-old would have to file a return because her income ($4,473 + $672) is larger than her standard deduction ($4,473 + $400).
Refer to Table 8.Standard Deduction Worksheet for Dependents.
You can also use the IRS interactive filing assistant: Do I Need to File a Tax Return?