Dependent's 1099 DIV + earning income = filing a return?

[Topangamama]

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!

[MarilynG1]

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.

@Topangamama 

[Topangamama]

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

[ErnieS0 · Accepted solution]

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?