Does a minor child have to pay taxes on a partime job if taxes are not taken from his check?

Answer 1

Answer

If a child's only income is interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends) and certain other conditions are met, a parent can elect to include the child's income on the parent's return. If this election is made, the child does not have to file a return. If he makes income other than interest & dividends, he is required to pay and file like anyone else. Of course, his earnings may be low enough that he is below the amount required to pay taxes.

Income from a part time job is taxable even if the child is a minor: i.e. over 16 (legal age for working). There is a catch. First if the child makes more than the personnel exemption deduction for the year, its beneficial that the child claims the wages. They generally would get back all taxes paid. The catch is, if they only paid a small amount of taxes, it would be more beneficial for the parent to claim them as their dependent and have the child file their income without claiming themselves as a dependent. The parent would receive more credit on their taxes, and the child is doing what is legally right. Hypothetically, to the child getting $300.00 dollars could be alot of money, but the parent being able to claim them as a dependent would help the parent far more. What the parent could do to avoid the child having their own taxes filed would be to offer them the $300.00 that they would have gotten if the child claimed themselves. Talk to a tax professional. it's all legal and very simple. The one thing you did say though was that the child did not pay taxes. Depending on who they worked for, they might receive a 1099. You didn't say if they received payment in form of check or cash. with a 1099 it has to be claimed but the above could still be applied. hope this answers your question.

The question is asked many ways and times - but basically - no there is no age limit, high or low, that changes the taxability or reporting of anyone.

As the above really addresses, the question you ask isn't really driven by his age though...it is that he/she is (presumably) your dependent on your return. Someone claimed as a dependent on someones elses return cannot be one on their own. And as a low wage earner pays a lower rate (or likely nothing at all in this case), and you may have a much higher rate on your (higher) earnings, there is a process in place to avoid someone from shifting some of their income to their children to benefit at the lower rate. Below explains:

A person who is a dependent may still have to file a return. This depends on the amount of the dependent's earned income, unearned income, and gross income. A dependent may also have to file if several other situations applies.

Responsibility of parent. If a dependent child who must file an income tax return cannot file it for any reason, such as age, a parent, guardian, or other legally responsible person must file it for the child. If the child cannot sign the return, the parent or guardian must sign the child's name followed by the words "By (your signature), parent for minor child."

Earned income. This is salaries, wages, professional fees, and other amounts received as pay for work you actually perform. Earned income (only for purposes of filing requirements and the standard deduction) also includes any part of a scholarship that you must include in your gross income. See chapter 1 of Publication 970, Tax Benefits for Education, for more information on taxable and nontaxable scholarships.

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.

Unearned income. This is income such as interest, dividends, and capital gains. Trust distributions of interest, dividends, capital gains, and Survivor annuities are considered unearned income also.

Election to report child's unearned income on parent's return. You may be able to include your child's interest and dividend income on your tax return. If you choose to do this, your child will not have to file a return. However, all of the following conditions must be met.

• Your child was under age 18 at the end of 2007. (A child born on January 1, 1990, is considered to be age 18 at the end of 2007; you cannot make the election for this child.)
• Your child had gross income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends).
• The interest and dividend income was less than $8,500.
• Your child is required to file a return for 2007 unless you make this election.
• Your child does not file a joint return for 2007.
• No estimated tax payment was made for 2007 and no 2006 overpayment was applied to 2007 under your child's name and social security number.
• No federal income tax was withheld from your child's income under the backup withholding rules.
• You are the parent whose return must be used when making the election to report your child's unearned income.

For more information, see Form 8814 and Parent's Election To Report Child's Interest and Dividends in Publication 929.