My child got a W2 in 2020 for about $2,100 . Should I report on my married filing jointly return or file a separate return - or ignore it since its below $12400.

[farhan_ahmad]

Does it matter where the money was earned from e.g. internship with an IT company or working for a non-profit religious org?  If filing is required anyways, then what are the consequence of missing to file a child tax return or reporting on your own return, if the total earned income is below the $12400 limit?

[xmasbaby0]

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 or 1099NEC 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://ttlc.intuit.com/questions/1900583-what-is-turbotax-free-file-program

[Opus 17 · Accepted solution]

You NEVER report a child's income earned from working on your tax return.  Income earned from working is only ever reported on a tax return in that person's own name.  (Sometimes, if a child's ONLY income is from investments, it can be included on a parent's return, but not if the income is from working.)

The child will file their own return.  In this case, since it is less than $12,400, they are not required to file unless they had withholding and want it refunded.  The child must answer "yes, I can be claimed as a dependent by someone else" on their tax return.  

A child's income does not, by itself, change their dependent status, as long as they meet the normal qualifying rules. 

[Mike9241]

if the child had self-employment income of under $400 (1099-misc, 1099-NEC or compensation for which no tax form was received)  and there was no federal withholding on forms W-2 (box 2), no Federal return need be filed. if your state has an income tax a return may be required.

[farhan_ahmad]

yes, there is  amount witheld in Fed, SS tax and medicare (box 2, 4 and 6). So the only consequence of not filing would be not getting some of that tax withheld back OR there are other consequences/penalties?  The total amount witheld in these 3 boxes is less less than $250 so even if some of it is returned it won't be much - that's why I am evaluating is it worth the hassle if it's not required to file.

Are there any other benefits of filing? e.g. the child receive a separate stimulas check!

[xmasbaby0 · Accepted solution]

The only amount your child can get back as a refund is the amount in box 2 for federal tax withheld and perhaps in box 17 if state tax was withheld.  He cannot get back anything that was withheld for Social Security or Medicare in boxes 3 or 4.   He is not "required" to file a tax return to get back a refund, but most kids like money, so why would he not file and get a refund?

No---he is still your dependent so he is NOT eligible for a stimulus check.  Dependents do not get stimulus checks.

[farhan_ahmad]

@xmasbaby0 per this article dependents can get stimulas check

https://www.bankrate.com/banking/savings/adult-dependents-stimulus-check-how-to-claim/

[Opus 17]

@farhan_ahmad 

No. Did you actually read the article?  The article says that adult dependents do not qualify for a stimulus payment or rebate, that it will be paid to the taxpayer who claims them as a dependent instead.  The article says that adult dependents should very carefully review their finances to make sure they actually can be claimed as a dependent, because if they file as independent, they would get the stimulus in their own name. Then the article says that adult dependents should not file as independent if it is not allowed in their situation, because that could cause an audit.

And the article title itself is false, because if an adult is independent and gets the stimulus in their own name, then they aren’t a dependent. And in fact, it is impossible for anyone who is a dependent of someone else to get a stimulus check or rebate in their own name.

The only way for an adult dependent to get a rebate in their own name is to not be a dependent any more.  If this is true, then all is well. If it is false, it is tax fraud.

And lastly, you said that your dependent is your child, for which the dependent rules are completely different.  

[farhan_ahmad]

yor are correct @Opus 17  I didn't read the article closely and mislead by the title. Thanks for your clarifications.