You can't add your dependent's W-2 income to your tax return.
You can never include a dependent child's earned income on your tax return. Assuming certain other conditions are met, a child's income can be included on the parents' tax return only if the child's income is limited to interest, dividends, and/or capital gain distributions.
Income: If your child earned income, she can still be claimed as a dependent as long as her gross income is below the IRS threshold for qualifying children, which is $4400 for 2023. If her income exceeds this amount, she may need to file her own tax return.
The child must have lived with you for more than half of the year.2 3. The person's gross income for the year must be less than $4,300.3 Gross income means all income the person received in the form of money, goods, property and services, that isn't exempt from tax.
To meet the qualifying child test, your child must be younger than you or your spouse if filing jointly and either younger than 19 years old or be a "student" younger than 24 years old as of the end of the calendar year.
Cons of Claiming a College Student as a Dependent
If your child has earned income and you claim them as a dependent, they lose the opportunity to claim their own personal exemption (when applicable in future years) and certain tax credits that could be more advantageous for them.
You can claim the Child Tax Credit (up to $2,000 per child) even if your child has a job or earns income, as long as they meet the dependent eligibility requirements.
Even if your student files their own tax return for part-time wages, as long as they are under 24 years old and enrolled in school full-time, you may still be able to claim them as a qualifying child.
Good Reasons
If your income disqualifies you from claiming these credits, your child's income probably doesn't disqualify him or her. Therefore, your child may be able to report payment of education expenses for tax purposes and then claim one of the credits – but only if you don't claim him or her as a dependent.
Child and Dependent Care Credit
If you have two or more children or dependents, you may be able to get a credit of up to 35% of $6,000 of qualifying expenses, or $2,100). The credit is nonrefundable, and so once your tax bill hits zero, you won't get any remaining amount as a refund.
When your business is owned by more than just you and your spouse, you'll need to pay your kids as an employee, including issuing a W-2 at the end of the year.
You can claim the Child Tax Credit by entering your children and other dependents on Form 1040, U.S. Individual Income Tax Return, and attaching a completed Schedule 8812, Credits for Qualifying Children and Other Dependents.
You don't—your dependent's W-2 isn't reported on your return. If your unmarried dependent's W-2 earnings exceed their Standard Deduction ($14,600 in 2024), they should file their own return and report the W-2 on their return.
You can use IRS Form 8814 to report your child's income on your tax return instead of them filing a separate tax return. If you choose to include your child's income, the first $1,300 of their income isn't taxed, but the next $1,300 may be taxed at up to 10% in 2024.
Steps to file your federal tax return
You will need the forms and receipts that show the money you earned and the tax-deductible expenses you paid. These include: A W-2 form from each employer.
A qualifying child can earn an unlimited amount of money and still be claimed as a dependent, so long as the child doesn't also provide more than half of their own support.
Gross income is the total of your unearned and earned income. If your gross income was $5,050 or more, you usually can't be claimed as a dependent unless you are a qualifying child. For details, see Dependents.
It's possible, but once you're over age 24, you can no longer be claimed as a qualifying child. The only exception to this is if you're permanently and totally disabled.
If you have a dependent who's earning income, good news — you can still claim them as a dependent so long as other dependent rules still apply. Your dependent's earned income doesn't go on your return. Filing tax returns for children is easy in that respect.
Here's the short answer: The Internal Revenue Service (IRS) will usually let you claim your child if they work or earn an income, no matter the dependent's income source, if certain requirements are met.
Payments for the services of a child are subject to income tax withholding regardless of age. Payments for the services of a child under the age 18 are not subject to social security and Medicare taxes.
If you're earning an income, either from a part-time job on campus or a summer internship, you'll need to consider filing a student income tax return if your earned income exceeds the minimum income to file taxes, which is essentially the standard deduction for your filing status.
If a child lived with each parent the same amount of time during the year, the IRS allows the parent with the higher adjusted gross income (AGI) to claim the child.
However, to claim a college student as a dependent on your taxes, the Internal Revenue Service has determined that the qualifying child or qualifying relative must: Be younger than the taxpayer (or spouse if MFJ) and: Be under age 19, Under age 24 and a full-time student for at least five months of the year.