Teens & Taxes: How Does Declaring Your Employed Teenager as a Dependent Affect Their Taxes?

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If your teenager is earning an income and filing taxes as a W-2 employee or a 1099 independent contractor (self-employed), you might wonder how claiming them as a dependent will affect their tax returns.

First, it’s important to note that you cannot claim your dependent’s earned income on your tax return. They must file their own if they owe money to the Internal Revenue Service. If they believe they might be getting a refund for overpayment of taxes in 2021, they will also want to file.

When your teenager files their taxes, they will need to check the box on their tax return that says, “Someone can claim you as a dependent.”

If your teen doesn’t work but has investment income, you can claim them as a dependent on your taxes as long as they meet the criteria for being a dependent. Your teen would not have to file taxes as long as that unearned income is less than $10,500. In that case, you’d declare your teen as a dependent and include the teen’s income as part of your household income on your tax return.

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