My son is 7 and he started selling art through his own Etsy shop. He did not meet the $20,000 level to receive a 1099-K. Should I have him file his own taxes?

It depends. If your son made more than $400, and he intended to make a profit, then he has started a business. He can still file a tax return while being claimed on your tax return as a dependent if you are providing more than 50% of his support.

 

When filling out his My Info section, check Yes under 3. A few other things we need to know, the first question: Someone else can claim me as a dependent on their tax return.

 

If this is more of a hobby, then he must report the income and will not be allowed to claim any expenses.

 

For more information, see: 

Selling Homemade Goods on Etsy? Use this Tax Preparation Checklist - TurboTax Tax Tips & Videos

Do I have to report hobby income?

Thank you @KathrynG3! In 2020 he made less than $400 but fully intends on this being a business, not a hobby. He already is working on a commissioned piece for 2021. Should he file his own taxes since his sales were under $400 or can I just add his income to my return?

You don't have to do either. The filing requirement for SE income; below that and you do not file a return. You do not ever put a child's earned income on your own return, except for certain circumstances asking for household income such as the Premium Tax Credit..