Even if your child had a job last year, you can still claim her as a dependent on your income taxes, provided the child is still considered a qualifying child based on IRS guidelines. However, depending on how much income your child earned, she may have to file her own tax return, too.
Qualifying Child Guidelines
Before you can claim a child as a dependent, she must meet either the qualifying child test or the qualifying relative test. To be a qualifying child, she must be either younger than 19 years old, or be a student younger than 24 years old at the end of the calendar year. Children who are permanently and totally disabled do not need to meet the age requirement. Additionally, your child cannot have provided more than half of her own support for the tax year. Further, your child must have lived in your home as her principal residence for more than half the year, with some exceptions, such as divorced or separated parents. If your child lives away from home because of school, you can still count your home as her principal residence.
Your Child's Earned Income
Children who earned an income of more than $6,350 in 2018 must file their own personal income tax returns and may have to pay taxes to the IRS. Earned income includes wages the child earned working for an employer, such as a summer job or part-time job. Even if your child earned less than $6,350, it might be wise to have her file a tax return because she may be eligible for a refund. A child who is blind has a higher minimum threshold of $7,900.
Your Child's Unearned Income
Unearned income – such as dividends and interest earned from savings and investments – is treated differently by the IRS than earned income. If your child earned more than $1,050 of unearned income for the 2018 tax year ($2,600 if she's blind), she can file her own return, or you can claim the amount on your own taxes. Either way, this unearned income must be reported to the IRS.
Filing a Child's Tax Return
If your child is capable of filing her own tax return, it is her responsibility to do so. If she isn't old enough to prepare her own tax return, then it's the parent's responsibility to file it on the child's behalf. If you are signing your child's tax return, sign the child's name followed by the words “By (your signature), parent for minor child."
Read More: How to Claim a Child Who Works on a Tax Return
You can still claim a child as a dependent, even if she works, as long as she still meets the criteria for a qualifying child. However, she may also need to file her own tax return, and if her income is more than half of her total support, she is no longer a qualifying child.
A published author and professional speaker, David Weedmark has worked as a consultant for many small businesses and non-governmental organizations, including several law firms and bar associations. David has also has written hundreds of articles on legal matters and small business trends for newspapers, magazines and online publications including About.com and American Express.