Do minors have to pay federal income tax

Whether it is a temporary summer job or full time employment, minors will need to fill out a Form W-4. The question arises: are minors exempt?

The query of a minor being exempt from withholding taxes is often met with uncertainty. This might be because minors, depending on jurisdictions, are generally under 18. Therefore, minors can’t vote, join the military, and are not considered an “adult” among their peers. Whatever the reason may be, the fact remains taxes are based off of salary and income, not age.

Although minors might not make enough money to be required to pay federal income taxes, they will still need to fill out a Form W-4. Generally, if a minor’s income does not exceed the standard deduction he or she will not be required to file a tax return. If the above scenario is true, then the minor can check the box on Form W-4 that classifies he or she as exempt from withholding. However, if a minor has a total income greater than $1,050 and greater than $350 of unearned income, such as interest and dividends, and is claimed a dependent on another individual’s W-4, he or she can’t claim exempt from withholding tax.

So, when it comes to minors and Form W-4, make sure to keep in mind the estimated income and dependent status; they both are important in deciding whether or not a minor is exempt.

These free resources should not be taken as tax or legal advice. Content provided is intended as general information. Tax regulations and laws change and the impact of laws can vary. Consult a tax advisor, CPA or lawyer for guidance on your specific situation.

To claim your child as your dependent, your child must meet either the qualifying child test or the qualifying relative test:

• To meet the qualifying child test, your child must be younger than you and either younger than 19 years old or be a "student" younger than 24 years old as of the end of the calendar year.
• There's no age limit if your child is "permanently and totally disabled" or meets the qualifying relative test.

In addition to meeting the qualifying child or qualifying relative test, you can claim that person as a dependent only if these three tests are met:

1. Dependent taxpayer test
2. Citizen or resident test, and
3. Joint return test

Additional Information:

• Whom May I Claim as a Dependent?
• Publication 501, Dependents, Standard Deduction and Filing Information

Subcategory:

Dependents

Category:

Filing Requirements, Status, Dependents

If the parents of a year-old child never married but live together with the child for the tax year, and both contribute to the cost of maintaining the household for the child and themselves, may they both file as head of household?

Answer:

No, only one parent may claim the child as a qualifying child to file as head of household.

• To file as head of household you must furnish over one-half of the cost of maintaining the household for you and a qualifying person. Therefore, only one of the parents will have contributed more than one-half of the cost of maintaining the household and be eligible to file as head of household.
• If both parents claim the child as a qualifying child, there is a tiebreaker rule to determine which parent may claim the child. See Publication 501, Dependents, Standard Deduction and Filing Information for more information.

Additional Information:

• What Is My Filing Status?

Subcategory:

Filing Status

Category:

Filing Requirements, Status, Dependents

We’re the divorced or legally separated parents of one child. May each parent claim the child as a dependent for a different part of the tax year?

Answer:

No, an individual may be a dependent of only one taxpayer for a tax year. You can claim a child as a dependent if he or she is your qualifying child. Generally, the child is the qualifying child of the custodial parent. The custodial parent is the parent with whom the child lived for the longer period of time during the year.

However, the child will be treated as the qualifying child of the noncustodial parent if the special rule for children of divorced or separated parents (or parents who live apart) applies. See Publication 504, Divorced or Separated Individuals for more information. This rule requires in part, that both of the following conditions are met:

• The custodial parent signs a Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent or a substantially similar statement, and
• The noncustodial parent attaches the Form 8332 or a similar statement to his or her return.

If the custodial parent releases a claim to exemption for a child, the noncustodial parent may claim the child as a dependent and as a qualifying child for the child tax credit or credit for other dependents. However, the noncustodial parent may not claim the child for the purpose of claiming head of household filing status, the earned income credit, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the health coverage tax credit.

Additional Information:

• Whom May I Claim as a Dependent?
• Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents?
• Publication 501, Dependents, Standard Deduction and Filing Information

Subcategory:

Dependents

Category:

Filing Requirements, Status, Dependents

My daughter was born on December 31. May I claim her as a dependent and also claim the child tax credit?

Answer:

Yes, if your child was born alive during the year and the tests for claiming your child as a dependent are met, you may claim her as a dependent. You may also be entitled to claim:

• The child tax credit (CTC) and/or additional child tax credit (ACTC)
• Head of household filing status
• The earned income credit (EIC)

For information about taxpayer identification number requirements, see the Instructions for Schedule 8812 (Form 1040) or My daughter was born at the end of the year. We're still waiting for a social security number. May I file my return now and provide her social security number later?

Refer to Publication 501, Dependents, Standard Deduction and Filing Information for more information.

Additional Information:

• Whom May I Claim as a Dependent?
• What Is My Filing Status?
• Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents?
• Use the EITC Assistant

Subcategory:

Dependents

Category:

Filing Requirements, Status, Dependents

My daughter was born at the end of the year. We're still waiting for a social security number. May I file my return now and provide her social security number later?

Answer:

If you file your return claiming your daughter as a dependent and don't provide her social security number (SSN) on your return, the IRS will not allow you to claim her as a dependent.

You have two options:

1. You may file your income tax return without claiming your daughter as a dependent. After you receive her SSN, you may then amend your return on Form 1040-X, Amended U.S. Individual Income Tax Return and claim your daughter as a dependent. Generally, you have three years after the date you filed your original return or two years after the date you paid the tax, whichever is later, to amend your return.
2. The other option is to file a Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. This option would give you an additional six months to file your return; by then you should have your daughter's SSN. However, any tax owed is due at the filing due date without the extension.

You may also be eligible to claim the earned income credit (EIC) and/or the child tax credit/additional child tax credit (CTC/ACTC). Please note that you may not claim your child as a qualifying child for the EIC on either your original or an amended return if your child doesn't have an SSN on or before the due date of your return (including extensions), even if your child later gets an SSN. Similarly, you may not claim your child as a qualifying child for the CTC/ACTC if your child doesn't have an SSN before the due date of your return (including extensions), even if your child later gets an SSN. However, if you have an SSN, but your child does not, you can still claim the EIC if you meet the other requirements for claiming the EIC. In this instance, you would get the EIC allowed to taxpayers without children, which is smaller than the EIC allowed to taxpayers with children. For more information about taxpayer identification number requirements, see the Instructions for Form 1040 (and Form 1040-SR) and Instructions for Schedule 8812 (Form 1040).

Additional Information:

• Whom May I Claim as a Dependent?
• Should I File an Amended Return?
• What Is the Due Date of My Federal Tax Return or Am I Eligible to Request an Extension?

Subcategory:

Dependents

Category:

Filing Requirements, Status, Dependents

How much income can an unmarried dependent student make before he or she must file an income tax return?

Answer:

An unmarried dependent student must file a tax return if his or her earned or unearned income exceeds certain limits. To find these limits, refer to "Dependents" under "Who Must File" in Publication 501, Dependents, Standard Deduction and Filing Information. You can also refer to Do I Need to File a Tax Return? to see if your income requires you to file.

Even if you don't have to file a federal income tax return, you should file if you can get money back (for example, you had federal income tax withheld from your pay or you qualify for a refundable tax credit). See "Who Should File" in Publication 501 for more examples.

Additional Information:

• Tax Information for Students

Subcategory:

Filing Requirements

Category:

Filing Requirements, Status, Dependents

My spouse and I are filing as married filing separately. We both contributed to the support of our son. Can we both claim him as a dependent on our separate returns?

Answer:

No, a child may only be claimed as a dependent on one return in a tax year.

For more information on which of you can claim your son, refer to Whom May I Claim as a Dependent?

Additional Information:

• Publication 501, Dependents, Standard Deduction and Filing Information

Subcategory:

Dependents

Category:

Filing Requirements, Status, Dependents

Can a state court determine who may claim a child as a dependent on a federal income tax return?

Answer:

Federal tax law is what determines who may claim a child as a dependent on a federal income tax return. Even if a state court order allocates the ability to claim the child to a noncustodial parent, the noncustodial parent must comply with the federal tax law to claim the dependent. The noncustodial parent must attach to his or her return a copy of the release of claim to exemption by the custodial parent, either a Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent or a substantially similar document.

Refer to Publication 504, Divorced or Separated Individuals for more information on the special rule for children of divorced or separated parents (or parents who live apart).

Additional Information:

• Whom May I Claim as a Dependent?
• Publication 501, Dependents, Standard Deduction and Filing Information

Subcategory:

Dependents

Category:

Filing Requirements, Status, Dependents

If I lived apart from my spouse from July 10 to December 31 but wasn't legally separated from my spouse under a decree of divorce or separate maintenance at the end of the year, may I file as head of household? Will my filing status allow me to claim a credit for childcare expenses and the earned income tax credit if I have a qualifying child?

Answer:

No, you may not file as head of household because you weren't legally separated from your spouse or considered unmarried at the end of the tax year. To be considered unmarried at the end of a tax year, your spouse may not be a member of your household during the last 6 months of the tax year and you must meet other requirements.

Your filing status for the year will be either married filing separately or married filing jointly.

• If you use the married filing separately filing status you can be treated as not married to claim the earned income tax credit. To qualify, the spouse claiming the earned income credit cannot file jointly with the other spouse, and satisfy certain other requirements (for example, not have the same principal residence as the other spouse for at least six months out of the year or have a written separation agreement and do not reside with their spouse at the end of the year), and must have a qualifying child living with them for more than half the year. You cannot claim the credit for childcare expenses since you were considered married. This credit requires married taxpayers to file a joint return to be eligible for the credit.
• You may be eligible to claim these credits if you decide to file a joint return with your spouse.

See What is My Filing Status? and Publication 501, Dependents, Standard Deduction and Filing Information for information about filing status.