She earned a couple thousand dollars over the summer. She is well below the filing requirement and although I withheld federal taxes, she's not getting a refund. I'm not sure why not...?
In an event, my question is since she neither owes taxes nor is getting a refund, should she still file? The only benefit I can think of is so she gets "credit" for working. I know you need 40 quarters of working to quality for social security benefits. I'm sure she'll get that eventually so my question is more curiosity than anything else.
I mispoke. She didn't have federal taxes withheld -- only state.
So that explains the $0 refund.
Should she still file for the reason I asked?
She should file a tax return to get a refund of federal taxes that were withheld if applicable. It is possible that you withheld social security and Medicare taxes but not federal income tax, that may explain why she's not getting a refund. Social Security and Medicare taxes are not refundable. There would be an entry in box 2 on her W-2 form if you withheld federal income taxes.
If she is going to file a state tax return she will have to file a federal tax return. State tax returns use information like Adjusted Gross Income (AGI) on the state return. In order to e-file a state tax return you have to file a federal return first, or at the same time.
And you don't need to be concerned about filing a tax return to get social security credit for working. If the information is on her W-2 the social security administration has it.