Teens & Taxes: My Teenager Received a 1099 for Gig Work — Now What?

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Did your teenager work any side gigs in 1099 through established companies? If a company or organization hired your teen as an independent contractor, your teen may have recently received a 1099 form in the mail — or electronically via email. What does it mean? What should they do with it?

See: Teens & Taxes: I Received a Child Tax Credit for My College Student – Do They Need to File Taxes?
Find: Teens & Taxes: My Teenager Took a Gig Job — Do They Need to File Taxes?

A 1099 form is a disclosure of “non-employee compensation.” Companies who pay contract workers more than $600 for the tax year are required to submit the 1099 form to the IRS and to send a copy to the worker before Jan. 31, in preparation for the upcoming tax season.

Prior to 2020, gig workers would receive a 1099-MISC form detailing their income. Now, that income is reported on a 1099-NEC form, which is specifically for “non-employee compensation.” The 1099-NEC form shows the amount of non-employee compensation received and should also indicate that there were no federal or state taxes withheld.

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When your teen receives the form, review it with them to be sure all the information is accurate, including their name, address, tax ID number or Social Security number — and, especially, the wages received. You will want to file the form in a safe place — with the rest of your tax paperwork — to reference it when you file.

Learn: Teens & Taxes: How To Help Your Teen Choose and Set Up a Bank Account During Tax Season
Explore: Teens & Taxes: My Teenager Had a Summer Job — Do They Need to File Taxes?

Your teen does not need to submit their 1099 form to the IRS. But they do need to declare the income on their W-2 form when they file tax returns. If they show net income of more than $400 from 1099 work, they are responsible for paying self-employment tax on the amount. Regardless of how much (or how little) 1099 income your teen made, if they receive a 1099 form they will need to file federal, and possibly state, tax returns.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.

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