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 then he must file a return and pay self-employment tax for Social Security and Medicare. You may want to use this version of TT for that:
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 then he must file a return and pay self-employment tax for Social Security and Medicare. You may want to use this version of TT for that:
You do not report his/her income on your return**. If it has to be reported at all, it goes on his own return. If your dependent child is under age 19 (or under 24 if a full time student), he or she must file a tax return for 2016 if he had any of the following:
1. Total income (wages, salaries, taxable scholarship etc.) of more than $6,300 (2016).
2. Unearned income (interest, dividends, capital gains) of more than $1050 (2016).
3. Unearned income over $350 and gross income of more than $1050
4. Household employee income (e.g. baby sitting, lawn mowing) over $2000 ($6300 if under age 18)
5. Other self employment income over $400, including box 7 of a 1099-MISC
Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.
He doesn’t get his own $4050 exemption (deduction), when he files. In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.
**If his only income is from interest and dividends, Alaska PFD or capital gains distributions shown on a 1099-DIV, there is a provision for entering it on your return, using form 8814. Enter at Less common income / Child's income.
But, it is usually best for him to file a separate return, as qualified dividends and capital gain distributions could be taxed at a higher rate on the parent's return.