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.
For the 2025 tax year, the first $1,350 of a child's unearned income qualifies for the standard deduction, the next $1,350 is taxed at the child's income tax rate, and unearned income above $2,700 is taxed at the parent's marginal income tax rate. For 2024, these values were $1,300, $1,300, and $2,600, respectively.
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.
- The income of a tax dependent is included in the household income of any household where both that tax dependent and his or her claiming tax filer are present, only if the tax dependent is expected to be required to file a tax return.
You should include the income of all dependents on your application. Note: Some dependents' income may not be counted if they're not required to file a federal income tax return for the year you want coverage. But include their income anyway.
This essentially means that a dependent child must file if their unearned income is more than $450 and they have any earned income (although there is a minimum gross income threshold of $1,300 in 2024 ($1,350 in 2025).
If your dependent is a qualifying child, there is no limit to the amount of income they can earn. Generally, to qualify, the child must meet the specific relationship, age, residency, and support requirements. However, if your dependent is classified as a qualifying relative, their gross income must not exceed $4,700.
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.
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.
The parent will have to pay tax on all the interest if it's above their own Personal Savings Allowance. You must also tell HMRC if a child has an income over their Personal Allowance, eg from a trust. The child will have to pay the tax on this. The tax year runs from 6 April to 5 April each year.
There is no age limit for how long you can claim adult children or other relatives as dependents, but they must meet other IRS requirements to continue to qualify. Additionally, once they are over 18 and no longer a student, they can only qualify as an "other dependent," not a qualifying child.
What is the gift tax exclusion? The basic gift tax exclusion or exemption is the amount you can give each year to one person and not worry about being taxed. The gift tax exclusion limit for 2023 was $17,000, and for 2024 it's $18,000.
A child who has only earned income must file a return only if the total is more than the standard deduction for the year. Your child will have to pay tax on the salary only to the extent it exceeds the standard deduction amount for the year: $14,600 in 2024.
Even if someone else, like a parent, claims you on their own tax return, you may still be required to file your own return.
If your dependent receives a Form W-2, you cannot report it on your tax return. Your dependent has to report the Form W-2 on their own tax return (if they are required to file). If you need help reporting Form W-2, go to our Form W-2 - Entering in Program FAQ.
If your child earns income but you claim them as a dependent, they may or may not be required to file a federal income tax return. However, even if they don't have a filing requirement but their employer withholds taxes from their paycheck, they may be eligible for a tax refund.
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.
Your parent's total income, including any taxable Social Security benefits, for the year is less than $4,700 in 2023, or $5,050 in 2024. Your parent isn't being claimed as a dependent by someone else, such as a sibling.
Under the qualifying relative test, there's no age requirement. However, the child's gross income must be less than $5,050 for the year. You must also provide more than half of the dependent's total support.
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.
Earned income includes salaries, wages, tips, professional fees, and taxable scholarship and fellowship grants. 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.
Your dependent children must file a tax return when they earn above a certain amount of income. Dependent children with earned income in excess of $14,600 must file an income tax return (for the 2024 tax year).
Changes to Certain Benefits
The five dependency tests – relationship, gross income, support, joint return and citizenship/residency – continue to apply to a qualifying relative. A child who is not a qualifying child might still be a dependent as a qualifying relative.
With that timeframe, California residents should keep their state tax records for at least four years. Be sure to securely dispose of you old tax [+] records.