I have a 15 year old dependent that is filing his taxes. He only made $4600. Am I required to claim his income as part of my healthcare tax credit?

[xmasbaby0 · Accepted solution]

No.   You do not claim your dependent's income on your tax return.

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 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:

https://turbotax.intuit.com/taxfreedom/

[Kenny525]

So, this doesn't apply?

If you have a dependent that’s filing a separate tax return, you’ll need to include their income in your modified adjusted gross income (MAGI). Your MAGI is the household income amount that’s used to calculate the premium tax credit you qualify for

[xmasbaby0]

Let's ask someone who understands healthcare credits better than I do.  @TaxGuyBill   Does this apply to a 15 year old's wages?

[TaxGuyBill]

Was his income from a job, or was it from something else?  Be as specific as possible.

[Kenny525]

He had a part time job at DQ that he made a bit over $4600. He filed since he had money coming back if he did.

[TaxGuyBill]

No, you do not need to include his income for purposes of the Premium Tax Credit (healthcare credit).

You only include his income if he has "taxable income" on his tax return (after the Standard Deduction).  With only "earned" income (from a job), he can earn up to $6350 of income (2017 numbers) before he would be REQUIRED to file a tax return due to having "taxable income".

Because his job income is under $6350, you do NOT need to include his income for purposes of the Premium Tax Credit (healthcare credit).

[Kenny525]

Thanks so much!

[xmasbaby0]

Thanks @TaxGuyBill !

[TaxGuyBill]

You are welcome.

As a side note, the Standard Deduction increases to $12,000 for 2018.  So as long as his income is under $12,000 in 2018, it won't affect your 2018 Premium Tax Credit.

[BobinCT]

Very interesting point!

[TaxGuyBill]

@BobinCT   As a side point, this probably should have 'hit' me before, but I had a discussion with a client last week that made me realize something.  Without the exemptions amounts ($4050), a dependent (claiming the $12,000 Standard Deduction) that becomes a non-dependent (still claiming the $12,000 Standard Deduction) won't affect reduce their "taxable income".  I've always been used to the fact that becoming a non-dependent reduces that taxes due to claiming the $4050 exemption, so that just hit me as being weird.