The IRS expects the person whose Social Security number appears on the IRS form 1099-INT to report the income. Do not report the income of your dependent on your personal Federal 1040 income tax return.
A dependent of another taxpayer is required to file his or her own tax return if:
- Your earned income (money you made by working) exceeds $13,850,
- Your unearned income (interest, dividends, capital gains, etc.) exceeds $1,250,
- Your business or self-employment net income (gross minus expenses) is at least $400,
- Your gross income (earned plus unearned) exceeds the larger of $1,250 or your earned income (up to $13,450) plus $400.
But even if your income falls below these filing requirements, the dependent will want to file their own tax return to get a refund of any federal or state taxes withheld from their paychecks.
The IRS defines earned income as:
- Taxable income you earned as an employee, such as wages, salaries, commissions, and tips,
- Profits from operating your business or farm,
- Long-term disability pay if received before the minimum retirement age,
- Union strike benefits.
The IRS defines unearned income as:
- Interest, dividend, or investment income,
- Retirement or Social Security income,
- Alimony or child support,
- Unemployment or worker's compensation,
- Gifts, prizes, awards, or winnings,
- Inheritances,
- Income received while incarcerated, even if it involves active work.
See also this TurboTax Help.
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