When Do Kids Have to File Taxes?
Children may usually be claimed as dependents on their parent's tax returns. As of 2009, the IRS states that a dependent must file a tax return if he has any of the following: earned income over $5.700, unearned income over $950 or gross income that totals the larger of $950 or up to $5,400 of earned income plus $300. Gross income is the combined total of earned and unearned income. Children who do not qualify as dependents must file a return if their income is $9,350 or greater.
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Earned Income
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According to the IRS, earned income includes salaries, wages, tips, professional fees, taxable scholarships and grants. A child who can be claimed as a dependent must file a return if her earned income is more than $5,700, as of 2009. If the child is blind, she must only file if her earned income is greater than $7,100.
Unearned Income
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The IRS states that unearned income includes taxable interest, dividends, capital gains, unemployment compensation, pensions, annuities, the taxable portion of social security benefits and certain trust distributions. As of 2009, a child who is a dependent must file a return if his unearned income is more than $950. If he is blind, the amount is increased to $2,350.
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Other Situations
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A child who is a dependent must file a tax return if she has income of at least $400 from self-employment, church income of at least $108.28, or if she received any earned income credit payments from her employer. She must also file a return if she owes any special taxes such as alternative minimum tax, retirement plan taxes, social security or medicare tax on unreported tips, recapture taxes, write-in taxes or household employment taxes.
Qualifying Child
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The IRS cautions that if a child earns at least $3,650, he usually cannot be claimed as a dependent unless he is also a qualifying child. You may claim your child as a qualifying child if the following tests are met: he is under age 19 at the end of the year, is younger than you or your spouse, he lived with you for more than half of the year and did not provide more than half of his own support, he is not filing a joint return and cannot be claimed by another taxpayer as a qualifying child. If you cannot claim him as your qualifying child, he is not a dependent and must file a tax return if his income was over $9,350, as of 2009.
Parental Responsibility
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If your child must file a tax return and cannot for some reason, it is your responsibility to file on her behalf. If she cannot sign the return, you must sign for her and include the words "By (your name), parent of minor child" after her name.
Parent Return
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The IRS allows parents to report their dependent child's unearned income on their tax return under certain conditions: the child must be under age 19 or age 24 if a full-time student; gross income must only include interest and dividends; gross income is less than $9,500 as of 2009; he must file a return if you do not; he does not file a joint return; no estimated tax payments or over-payments were applied to his current year return and no federal income tax was withheld with regard to backup withholding rules. If these conditions are met, the child does not have to file his own return.
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References
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