Children & Taxes
What is the minimum age for a child to file a tax return ?
There is no set mimimum age for a child to file his/her tax return. If the child has taxable income, the child must pay taxes. So even toddlers have to pay income tax if there is taxable income.
Taxable income is defined as Income (minus) tax deductions.
Although it is higlhy unlikely that a toddler could have earned income, it is very likely he/she could have income from investments - dividends interest etc. This is called unearned income
If the child is under age 18, the child's unearned income can be reported along with the parents income providing certain conditions are met.
For additional details see Form 8814 and Parent's Election To Report Child's Interest and Dividends in Publication 929 on the IRS Website
As soon as the child turns 18, has earned income or income from capital gains a separate return should be filed for the child.
From IRS Website : Child's earnings. Amounts a child earns by performing services are his or her gross income. This is true even if under local law the child's parents have the right to the earnings and may actually have received them. If the child does not pay the tax due on this income, the parent is liable for the tax.
Does Tax Software Handle Childs Tax Situation ?
To our knowledge, most tax software and online tax preparation websites does handle this scenario correctly and advice on whether the child requires a separate tax return or whether the income needs to be reported on the parent's tax return. Generally the tax software asks you questions about our family situation as the very first step. So the software knows your childs age, their income etc when making the filing determination.
Standard disclaimer: This is not to be construed as tax advice. Tax laws change every year, always consult the IRS and a qualified tax pro for up to date changes in tax laws and tax advice. |