Taxes for Children

[HJCouri5]

My children (all age 17 or younger) each have their own interest bearing bank accounts for which i am jointly listed (i.e., non-custodial).  They each receive a 1099-INT from our financial institution.  A few of them have done odd jobs to earn spending money.  In no case has the earned AND unearned income of each child exceeded $1,000.  Does this need to be reported, and if yes, how?

[Critter-3]

It depends if the odd jobs was considered  earned  income or if it was unearned income. If it was earned income then they will have to file if it is $400 or more.

Please see the filing requirements for dependents:

• Your earned income (money you made by working) exceeds $12,400
• Your unearned income (interest, dividends, capital gains, etc.) exceeds $1,100
• Your business or self-employment net income (gross minus expenses) is at least $400
• Your gross income (earned plus unearned) exceeds the larger of $1,100 or your earned income (up to $12,050) plus $350

Take a look at the following TurboTax article to see what your income requirement would be:

Do I need to file a Federal return this year?

[Carl]

.

[HJCouri5]

Do SE income and unearned income each stand on there own reporting merits unless they jointly exceed the combined threshold?

[Critter-3]

Bingo.

[Hal_Al]

You do not report his/her income on your return. If it has to be reported, at all, it goes on his 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 2022 if he had any of the following:

1.          Total income (wages, salaries, taxable scholarship etc.) of more than $12,950 (2022).
2.          Unearned income (interest, dividends, capital gains, unemployment, taxable portion of 529 distribution) of more than $1150 (2022)
3.          Unearned income over $400 (2022) and gross income of more than $1150 (2022)
4.          Household employee income (e.g. baby sitting, lawn mowing) over $2300 ($12,950 if under age 18)
5.          Other self employment income over $432, including money on a form 1099-NEC

If his only income is from interest and dividends, Alaska PFD or capital gains distributions shown on a 1099-DIV, there is a provision for entering it on your return, using form 8814.

[Opus 17 · Accepted solution]

If the child's only income is interest and dividends, it can be reported on a parent's return.  If the child has any income earned from working, then all the child's income must be reported on a tax return in the child's name.  This usually does not prevent you from claiming them as dependents. 

You can put the child's information into this web site to verify if they need to file.

https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return