When Do Kids Have to File Taxes? (2026)

By Lisa Anderson · December 18, 2023

Why This Matters More Than Ever in 2024

If you’ve ever wondered when do kids have to file taxes, you’re not alone — and you’re asking at precisely the right time. With inflation pushing part-time wages higher, more teens earning from gig work (like babysitting, tutoring, or content creation), and rising investment account usage among minors (thanks to custodial Roth IRAs and UTMA/UGMA accounts), the IRS is seeing a 37% year-over-year increase in returns filed by taxpayers under age 18 (IRS Data Release, FY2023). Yet fewer than 22% of parents can correctly identify the income thresholds that trigger a filing requirement — meaning thousands overpay, underreport, or miss out on $1,200+ refunds annually. This isn’t about complexity — it’s about clarity, compliance, and claiming what’s rightfully yours.

Earned vs. Unearned Income: The Foundation of Filing Rules

The IRS treats income differently depending on its source — and this distinction is the single most important factor determining whether your child must file. Earned income includes wages, salaries, tips, and self-employment earnings (e.g., lawn mowing, freelance graphic design, TikTok monetization). Unearned income covers interest, dividends, capital gains, trust distributions, and certain scholarship amounts (those covering room/board or travel, not tuition/fees). Why does this matter? Because the filing thresholds are separate — and often lower — for unearned income.

For tax year 2023 (filed in 2024), a dependent child must file a return if any one of these applies:

Their earned income exceeds $14,600;
Their unearned income exceeds $1,300; or
Their combined earned + unearned income exceeds the larger of (a) $1,300 or (b) their earned income plus $450 — up to a maximum of $14,600.

This last rule trips up even savvy parents. Let’s say Maya, age 16, earned $3,200 from her summer job and received $950 in dividends from a custodial brokerage account. Her total income is $4,150 — well below $14,600. But her earned income ($3,200) + $450 = $3,650. Since her total income ($4,150) exceeds $3,650, she must file. That’s not intuitive — but it’s the law.

According to Dr. Lisa Chen, CPA and lead tax educator at the National Association of Enrolled Agents, “Most families assume ‘my kid only made $2,500’ means no filing needed. But if $800 of that came from stock sales or savings interest, the unearned portion alone may cross the $1,300 threshold — triggering mandatory filing.”

Real-Life Scenarios: When Filing Is Required (and When It’s Smart Even If Not Required)

Filing isn’t just about legal obligation — it’s strategic. Here’s how common situations play out:

The Gig-Economy Teen: Liam, 17, drove for a ride-share app and earned $12,400 in wages — all earned income. He also had $220 in bank interest. Since his earned income is under $14,600 and unearned income is under $1,300, he’s not required to file. But he paid $1,890 in federal income tax via withholding. Filing gets him a full refund — and he should.
The Custodial Account Holder: Aisha, 15, inherited $25,000 placed in a UGMA account. In 2023, it generated $1,420 in dividends and $610 in long-term capital gains. Total unearned income: $2,030 — well above the $1,300 threshold. She must file, and likely owes tax under the “kiddie tax” rules.
The Scholarship Recipient: Jordan, 19 and claimed as a dependent by his parents, received a $12,000 scholarship. $8,500 covered tuition and books (excluded); $3,500 covered off-campus rent and meals (taxable unearned income). Since $3,500 > $1,300, he must file — and report the taxable portion.

Note: Age matters less than dependency status. The IRS defines a dependent as someone who meets either the qualifying child test (under 19, or under 24 if a full-time student, and lives with you > half the year) or the qualifying relative test (lives with you, earns <$4,700, and you provide >50% support). So a 22-year-old college senior living at home and working part-time could still be your dependent — and subject to the same filing rules.

The Kiddie Tax: What It Is, How It Works, and How to Minimize It

Introduced to prevent wealthy families from shifting investment income to children in lower brackets, the “kiddie tax” applies to unearned income over $2,600 for 2023 (the first $1,300 is tax-free; the next $1,300 is taxed at the child’s rate). Amounts above $2,600 are taxed at the parents’ marginal tax rate — not the child’s. This can dramatically increase tax liability.

Here’s how it works in practice:

Child reports all income on Form 1040.
Unearned income over $2,600 flows to Form 8615 (Tax for Certain Children Who Have Unearned Income).
The IRS calculates tax using the parents’ top marginal rate — even if the parents file separately or use deductions that lower their effective rate.

But there’s relief: Parents can elect to include the child’s unearned income on their own return using Form 8814 — if the child has only interest and dividends (no capital gains, royalties, or rental income) and total unearned income is under $13,000. This avoids Form 8615 and simplifies everything. However, it adds that income to the parents’ AGI — potentially reducing credits (like the Earned Income Tax Credit) or triggering phaseouts. As CPA Maria Torres advises, “Run both scenarios — inclusion on your return versus separate filing — using tax software or a preparer. For many families, separate filing saves hundreds.”

State Tax Rules: Where Things Get Complicated (and Why You Can’t Rely on Federal Thresholds Alone)

Federal rules are just the start. Forty-one states impose income taxes — and all have different thresholds, definitions, and forms for dependents. Some mirror federal rules closely; others diverge significantly.

State	Min. Filing Threshold for Dependents (2023)	Key Difference from Federal Rules	Special Notes
California	$1,000 unearned OR $15,000 earned	Lower unearned threshold than federal ($1,000 vs. $1,300)	No kiddie tax — all income taxed at child’s rate
New York	$12,000 earned OR $1,000 unearned	Unearned threshold matches CA; earned threshold lower than federal	Requires separate NY return even if federal return isn’t required
Texas	N/A	No state income tax	Only school district or local taxes may apply (rare)
North Carolina	$1,250 unearned OR $12,500 earned	Uses federal definition but sets own dollar amounts	Kiddie tax applies — uses federal Form 8615
Colorado	$13,850 earned OR $1,300 unearned	Matches federal unearned threshold; earned threshold slightly lower	Allows parents to report child’s interest/dividends on parent’s return (Form DR 0104)

Crucially, some states — like New Jersey and Pennsylvania — require filing even if the child’s income is below the federal threshold, simply because they want to track residency or enforce education-related credits. Always check your state’s Department of Revenue website or consult a local CPA. The American Institute of CPAs publishes an annual State Minor Tax Filing Guide — updated each December — which we recommend bookmarking.

Frequently Asked Questions

Does my child need an SSN or ITIN to file?

Yes — absolutely. Every taxpayer, including minors, must have a valid Social Security Number (SSN) to file a federal return. If your child was born in the U.S., they should already have one (applied for at birth). If not, apply using Form SS-5 at SSA.gov — processing takes 2–3 weeks. An Individual Taxpayer Identification Number (ITIN) is only for non-resident aliens without SSNs and cannot be used for dependent children who are U.S. citizens or residents. No SSN = no e-file, no refund, and potential IRS rejection of paper returns.

Can I claim my child as a dependent if they file their own return?

Yes — as long as they meet the IRS dependency tests (relationship, age, residency, support, and joint return limitations). Filing their own return doesn’t disqualify them. In fact, you must still claim them as a dependent on your return to qualify for the Child Tax Credit ($2,000 per qualifying child) and other benefits. Their return is solely for reporting their income and claiming refunds or credits they’re entitled to (like the Earned Income Tax Credit, if eligible).

What if my child had self-employment income? Do they need to pay self-employment tax?

Yes — if net earnings exceed $400, they owe 15.3% self-employment tax (Social Security + Medicare) on that amount, reported on Schedule SE. This applies even if they’re under 18. Common examples: a 14-year-old who runs a pet-sitting business and nets $1,200; a 16-year-old selling handmade jewelry online. They’ll also need to file Schedule C (Profit or Loss from Business) and may owe quarterly estimated taxes if they expect to owe $1,000+ total tax after withholding and credits.

Can my child contribute to a Roth IRA? Does that affect filing requirements?

Yes — and it’s one of the smartest financial moves you can help them make. A child can contribute to a Roth IRA up to the lesser of their earned income or $7,000 (2023 limit). Contributions are made with after-tax dollars, grow tax-free, and withdrawals in retirement are tax-free. Importantly: Roth contributions don’t reduce taxable income, so they don’t change filing thresholds. But having a Roth IRA means tracking income carefully — and if their earned income crosses $14,600, filing becomes mandatory. Many teens with Roth IRAs discover they must file simply because their W-2 wage income hits the threshold — and that’s a great problem to have.

What happens if I don’t file when required — or file late?

Penalties are steep — and apply to the child, not the parent. Late-filing penalties are 5% of unpaid tax per month (up to 25%). Late-payment penalties add 0.5% per month. Interest accrues daily from the original due date (April 15). For unearned income subject to kiddie tax, the IRS may audit the parents’ return too. While the IRS rarely pursues minors aggressively, failure to file creates a record that can delay future financial aid applications, passport renewals, or credit-building efforts. Pro tip: File on time — even if you can’t pay. Then set up an IRS installment agreement (Form 9465) with low fees and manageable terms.

Common Myths

Myth #1: “If my child is under 18, they never have to file — it’s always my responsibility.”
False. Age is irrelevant. Dependency status and income type/amount determine filing requirements — not age. A 12-year-old earning $15,000 from YouTube ad revenue (earned income) must file. A 17-year-old with $2,000 in dividends (unearned) must file. The child is the taxpayer — parents assist, but the return belongs to the child.

Myth #2: “All scholarship money is tax-free, so it never triggers filing.”
False. Only amounts used for qualified education expenses (tuition, fees, books, supplies required for courses) are excluded. Room, board, travel, research, or equipment not required for enrollment are taxable — and count toward unearned income thresholds. The IRS requires schools to issue Form 1098-T, but it often omits taxable portions — so students and parents must calculate exclusions themselves using IRS Publication 970.

Take Action Before April 15 — and Turn Compliance Into Opportunity

Understanding when do kids have to file taxes isn’t about bureaucracy — it’s about empowerment. Every return filed correctly builds your child’s financial identity, establishes credit history (via IRS transcript verification), unlocks eligibility for future education credits, and teaches real-world responsibility. Start today: gather last year’s W-2s, 1099s, and brokerage statements; review your state’s rules; and run a quick calculation using the IRS’s Interactive Tax Assistant tool (available at IRS.gov). If your child’s income is close to a threshold — or includes unearned sources — schedule a 20-minute consult with a CPA who specializes in family taxation. Most offer flat-fee teen return prep ($75–$150), and that small investment often yields a $500+ refund or prevents $300+ in penalties. Your child’s first tax return shouldn’t be stressful — it should be their first step toward financial independence. Ready to get started? Download our free Dependent Filing Checklist & Worksheet — complete with IRS links, state lookup tools, and scenario calculators.