Question on how to report my dependent who is a full time student and their income that exceeds 12,500?

[DoninGA · Accepted solution]

If they are a full time student and under the age of 24 in 2023, then their income is not a factor when claiming them as a dependent.  What is a factor is if they provided over one-half of their own support.

You can claim them as a dependent under the Qualifying Child rules if they meet all the requirements.  

You Do Not enter their earned income on your tax return.  They can file their own return and indicate on their tax return that they can be claimed as a dependent.

To be a Qualifying Child -

1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.
2. The child must be (a) under age 19 at the end of the year, (b) under age 24 at the end of the year and a full-time student or (c) any age and permanently and totally disabled.
3. The child must have lived with you for more than half of the year. Temporary absences while away at college are considered living with you.
4. The child must not have provided more than half of his or her own support for the year.
5. If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child.
6. The child must be a U.S. citizen or U.S., Canada or Mexico resident for some portion of the year.
7. The child must be younger than you unless disabled.

[DianeW777 · Accepted solution]

It depends.  Even a dependent, must generally need to file their own 2023 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, you'll want to file your own tax return to get a refund of any federal or state taxes withheld from your paychecks.

On your return, the rules for claiming a qualifying child are shown below.

You can claim a child as a dependent on your 2023 taxes as long as they meet the following requirements:

Qualifying child:

• They're related to you.
• They aren't claimed as a dependent by someone else.
• They're a US citizen, resident alien, national, or a Canadian or Mexican resident.
• They aren’t filing a joint return with their spouse.
• They're under the age of 19 (or 24 for full-time students).
  • There's no age limit for permanently and totally disabled children.
• They lived with you for more than half the year (exceptions apply).
• They didn't provide more than half of their own support for the year.

@Tori-Mom