Your child has started earning their own money, but you’re still claiming them as a dependent on your federal income tax return. How will this situation affect your taxes?
One of the most common tax questions parents have is whether they should report their dependent child’s W-2 form on their income tax return or if the child should file their own return. Here’s what you need to know before you file taxes this year.
Should my child file their own tax return?
You cannot report your child’s Form W-2 on your tax return. If your child has earned income, they generally need to report it on their own tax return — not yours. Whether they’re required to file depends on how much they earned, whether taxes were withheld, and whether they had other income (like self-employment or investment earnings). Even when filing isn’t required, your child may still want to file to claim a refund of withheld taxes.
However, even if your child must file separately, you can still claim them as a dependent on your taxes if they meet the criteria of a qualifying child. When your child files (or you file a separate return for your child), they will simply need to indicate that they can be claimed as a dependent on someone else’s return (a.k.a. your return).
Is my child required to file taxes?
Most taxpayers only need to file an income tax return if their gross income exceeds the standard deduction. For the 2026 tax year, that threshold is $16,100 for a single filer (up from $15,750 in 2025).
If you claim your child as a dependent, their standard deduction is the greater of $1,350 or earned income + $450, capped at $15,750 in 2025 or $16,100 in 2026.
A dependent with only W-2 income generally must file if wages exceed that cap for the year.
But there are certain situations where your dependent child may still need to file their own tax return, even if their income is below that amount:
- If your child’s only income is from a W-2 and it’s below the dependent filing threshold, they often don’t need to file — but they may still want to file if federal income tax was withheld.
- If your child earned more than $400 from self-employment — like babysitting, lawn mowing, or online freelance work — they must file a separate return and may owe self-employment tax.
- Children with both W-2 and self-employment income may need to file if their gross income exceeds the dependent filing threshold, which is generally the greater of $1,350 or their earned income plus $450 (or if they have $400 or more in net self-employment earnings, which triggers self-employment tax filing rules).
- If your child has unearned income, such as dividends, capital gains, or interest, different filing requirements apply depending on the amount of the income.
- If Social Security or other taxable benefits were received, those may affect their overall tax situation.
For more information on your child’s tax filing requirements, check out Tax Basics for Teens: Filing Your First Tax Return.
How do I know if my child qualifies as a dependent?
For your child to qualify as a dependent, they must meet the following IRS requirements:
- They must be your son, daughter, stepchild, eligible foster child, brother, sister, half-sibling, stepsibling, or a descendant of any of them (your niece or nephew, for example).
- They must be under 19 years old (or under 24 years old if they are a full-time student). If they were permanently disabled at any time during the year, there is no age threshold.
- They must have lived with you for more than half of the year. Exceptions include the child being temporarily away at college, in the hospital, or in juvenile detention.
- They must get more than half of their financial support from you during the year.
- They must be younger than you unless they are disabled.
- They must be a U.S. citizen, U.S. national, resident alien, or a resident of Canada or Mexico.
- They didn’t file a joint return with a spouse (unless it was only to claim a refund of withheld tax).
- The child must not be claimed as a dependent by someone else (there are rare exceptions). They also cannot claim any dependents on their own tax return.
Can I claim my child’s investment income on my tax return?
Parents can sometimes include a child’s interest and dividend income on their own return using Form 8814, but only if the child had no other income (including no W-2 wages), meets age rules, and had less than $13,500 in gross income for 2025 ($13,500 for 2026 as well).
If your child has both a W-2 and investment income, you generally cannot use Form 8814. The child will need to file their own return.
Dependent children with more than $1,350 in unearned income are generally required to file, even if you don’t use Form 8814.
If unearned income exceeds $2,700 (2025 and 2026), the kiddie tax may apply, and the child may need Form 8615 so income above that amount is taxed at the parents’ rate.
Remember, Form 8814 is only an option if your child has no earned income (including no W-2 wages). If your child has any earned income, they must file their own return. If your child has only interest and dividends and you qualify to use Form 8814, the child may not need to file a separate return.
The bottom line
Helping your child file their own income tax return is a great way to teach real-world tax basics while keeping your family’s tax situation compliant with IRS rules. Whether they earn W-2 income, have unearned income from investments, or do self-employed gig work, understanding filing requirements and tax deductions early can set them up for future success.
Unsure what type of income your child has or which tax credits you or they might qualify for? You don’t have to be a tax pro to DIY your taxes. Try out TaxAct’s easy-to-use tax software and e-file with confidence this tax year. You can also consult credentialed tax experts during the tax preparation process with us by adding Xpert Assist to your return.*
This article is for informational purposes only and not legal or financial advice.
All TaxAct offers, products and services are subject to applicable terms and conditions.
* Tax Experts are available with TaxAct® Xpert Assist®, which encompasses a suite of services designed to provide varying levels of support and assistance for your tax filing needs. These services are available at an additional cost and are subject to limitations and restrictions. Service availability, features, and pricing may vary and are subject to change without notice. For more details, read full terms.