Dependent child earned income

[akmughal]

Hello,

I have a dependent child 14 years old. He worked during the summer break and earned  $2,500.

Can I include his earned income to my tax return since he’s my dependent or he will have to file his own return?

Please guide.

Thanks,

Asif

[xmasbaby0]

MY DEPENDENT HAD A JOB

If your dependent has a W-2 for his after-school job, summer job, etc. you do not include the information on your own return. You can still claim your child as a dependent on your own return.  He/she can file his own return for a refund of some of his withheld wages (he won’t get back anything for Social Security or Medicare), but MUST indicate on it that he can be claimed as a dependent on someone else’s return.  (Supervise this closely or prepare it for him!)

If your dependent’s earnings were over $400 and were reported on a 1099Misc or 1099NEC then he must file a return and pay self-employment tax for Social Security and Medicare.

You might also want to use free software from the IRS Free File versions:

https://apps.irs.gov/app/freeFile/

[Bsch4477]

I assume he has a W-2. Is so, he only needs to file a return if he has had tax withheld. If he got a 1099-NEC he has to file his own return taking care to check the box saying that someone can claim him. 

[SharonD007]

No, you can't include your child's earned income on you tax return.  Your child can file a tax return to get a refund. When completing their taxes, make sure that they enter that they can be claimed as a dependent on someone else’s tax return. ‌

Refer to the TurboTax article: How do I indicate that I can be claimed as a dependent on someone else's return?

If your child received their income on a 1099-NEC or 1099-MISC, the income is considered self-employment income and will be reported on a Schedule C.  The good thing is that you'll be able to deduct reasonable and customary business expenses from that income.

To report self-employment income, follow the steps below:

1. Open TurboTax.
2. Enter self-employed income in the search bar 
3. Select the Jump to link at the top of the search results.
4. Answer Yes on the Did you have any self-employment income or expenses? screen.
5. Answer the questions on the following screens until you arrive at Let's enter the income for your work.
6. Select 1099-NEC and select Continue.
7. You can enter the info from your 1099 form on the following screens.

For additional information, refer to the TurboTax Help articles How to File Taxes with IRS Form 1099-NEC, Reporting Self-Employment Business Income and Deductions, and What self-employed expenses can I deduct?

@akmughal

[rjs]

You cannot include your child's earned income on your tax return.

If he has $2,500 of income on a W-2 he is not required to file a tax return. He might want to file to get a refund of income tax that was withheld. Social Security and Medicare taxes cannot be refunded. If no federal or state income tax was withheld, there is nothing to be refunded.

If he has $2,500 of income that is not on a W-2 he is required to file a tax return. It doesn't matter whether he got a 1099-NEC, a 1099-MISC, or no tax form. He will not have to pay any income tax, but he will have to pay self-employment tax.

If he files a tax return for any reason, make sure he checks the box that says someone can claim him as a dependent.