You do not (and are not allowed to) report her income on your return. If it has to be reported
at all, it goes on his/her 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 2012 if he had
any of the following:
- Total income (wages, salaries, taxable
scholarship etc.) of more than $5,950.
- Unearned income (interest, dividends, capital gains)
of more than $950.
- Unearned income over $300 and gross income of
more than $950
- Household employee income (e.g. baby sitting,
lawn mowing) over $1800 ($5950 if under age 18)
- Other self employment
income over $400
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.
A child of a taxpayer
can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:
1. He is under age 19,
or under 24 if a full time
student for at least 5 months of the year, or is totally & permanently
disabled
2. He did not provide
more than 1/2 his own support
3. He lived with the parent (or was away at school)
for more than half the year
So, it doesn't matter
how much he earned. What matters is how much he spent on support. Money he put
into savings does not count as support he spent on him self.
The support value of
the home you provided is the fair market rental value of the home plus utilities
& other expenses divided by the number of occupants.
Furthermore, there is a
rule that says IF somebody else CAN claim him as a dependent, he is not allowed
to claim his own exemption. If he has sufficient income (usually more than
$5950), he can & should still file taxes; he just doesn’t get his own $3800
exemption (deduction). In TurboTax, he indicates that somebody else can claim
him as a dependent, at the personal information section.
