With just a few clicks online, anyone can earn extra money, and children are no exception. Generating income at a young age is more accessible than ever. Whether it is social media influencing, investing through an app, or working a traditional part-time job, the income-earning opportunities for teens are endless. As a parent, you may be wondering: Does my child need to file a tax return? It’s one of the most common questions we hear, and the answer depends on several factors.
Here’s a guide to help you answer that question.
What Type of Income Does Your Child Have?
The IRS separates income into two categories:
- Earned income: Money your child worked for, such as wages from a job or self-employment income from babysitting, lawn mowing, or other freelance work.
- Unearned income: Money that came from investments, such as interest, dividends, or capital gains from a brokerage account.
Filing Thresholds
The filing thresholds depend on which type of income your child has.
Earned Income Only
Generally, a dependent child needs to file a tax return if their earned income exceeds the standard deduction ($16,100 for single filers in 2026).
Unearned Income Only
If your child’s income is solely from investments rather than a job, the income threshold is just $1,350 for 2026.
A Combination of Both
If your child has both types of income, the filing requirement becomes more complex. A return is generally required once total income exceeds the greater of:
- $1,350, or
- Your child’s earned income plus $450 (not to exceed the $16,100 standard deduction)
Other Situations That May Require Filing
Even if your child’s income falls below the thresholds above, filing a return may still be required in certain situations:
- Self-Employment income: A child with net income of $400 or more from self-employment may owe self-employment taxes. This could include freelance work, odd jobs, or income from a small business.
- Tip income: If your child earned tips and owes Social Security and Medicare taxes on those earnings, a return is required regardless of total income.
- Scholarship or fellowship income: Scholarship income used for tuition, required fees, books, and course supplies is generally tax-free if the student is pursuing a degree. However, amounts used for room and board, travel, or optional equipment are taxable, as are amounts received in exchange for teaching, research, or other required services.
It May Still Make Sense to File Even if It Is Not Required
Even if your child is not required to file a tax return, voluntarily filing may still be beneficial in certain situations:
- To receive a refund: If your child had federal or state income taxes withheld from their paycheck, filing a return is the only way to get that money back.
- To claim certain tax credits: If your child is not claimed as a dependent, they may be able to qualify for the refundable American Opportunity Tax Credit.
- To build good financial habits: Learning how taxes work early in life can help teens and young adults build financial confidence and establish healthy money habits for the future.
The “Kiddie Tax”
The kiddie tax prevents parents from shifting investment income to their children in order to take advantage of lower tax brackets. This special circumstance applies only to unearned income.
The kiddie tax applies to those who are (at the end of the tax year):
- Under age 18
- Age 18, if earned income is less than or equal to half of their support
- Full-time students ages 19-23, if earned income is less than or equal to half of their support
How does it work? If the kiddie tax rules apply, unearned income is generally taxed as follows:
- $0 to $1,350: Not taxed since it is below the filing threshold
- $1,350 to $2,700: Taxed at your child’s rate
- $2,700 and above: Taxed at the parents’ rate
Quick Reference Checklist
If you answer “yes” to any of the following, a tax return likely needs to be filed.
Did your child:
- Earn more than $16,100 from a job?
- Earn $400 or more from self-employment?
- Receive more than $1,350 in investment income?
- Earn tip income with unpaid Social Security and Medicare taxes?
- Have federal or state income taxes withheld from a paycheck?
Questions? We’re Here to Help
Tax laws are constantly changing, and whether your child needs to file will depend on their specific situation. Before filing, consider speaking with your Financial Symmetry advisor and/or tax professional to ensure all requirements are met and to identify potential tax-saving opportunities.
This article discusses federal tax filing requirements only. Individual state requirements may differ.
