If someone can claim you as a dependent, your 2026 standard deduction is the greater of $1,350 or your earned income plus $450, and it cannot exceed $16,100, which is the basic standard deduction for a single filer.1Internal Revenue Service. Rev. Proc. 2025-32 A dependent with little or no earned income gets just $1,350. A dependent with a paycheck can shelter much more.
How the Formula Works
The calculation has two steps. First, compare these two numbers and take the larger:
- $1,350 (the fixed floor), or
- Your earned income plus $450.
Then cap the result at the basic standard deduction for your filing status. For a single filer in 2026, that cap is $16,100.1Internal Revenue Service. Rev. Proc. 2025-32 The cap only matters once wages approach $15,650, because $15,650 plus $450 reaches the ceiling.
The split between earned and unearned income drives everything. Earned income means wages, salaries, tips, and other pay for work you performed. Unearned income means investment returns: interest, dividends, capital gains. Only earned income lifts the deduction above the $1,350 floor. Unearned income does not enter the formula.
What the Deduction Looks Like by Income Type
Earned Income Only
A dependent with only wages gets the most favorable result. A college student who earns $6,000 at a part-time job and has no investment income runs the formula this way: $1,350 versus $6,000 plus $450, which is $6,450. The deduction is $6,450, wiping out the full $6,000 and leaving nothing taxable.2Internal Revenue Service. Topic No. 551, Standard Deduction Most working teenagers land here. As long as wages stay under $15,650, the deduction exceeds total income and the tax bill is zero.
Unearned Income Only
Living on investment income is the harshest case. A child with $4,000 in dividends and no wages compares $1,350 against $0 plus $450. The deduction is $1,350, the minimum.1Internal Revenue Service. Rev. Proc. 2025-32 That leaves $2,650 of taxable income, and the Kiddie Tax may pull part of it into the parent’s bracket.
A Mix of Both
When a dependent has wages and investment income, only the wages raise the deduction. Take a dependent with $1,200 in wages and $2,000 in interest. The formula compares $1,350 against $1,200 plus $450, so $1,650. The deduction is $1,650 against total gross income of $3,200, leaving $1,550 taxable.2Internal Revenue Service. Topic No. 551, Standard Deduction The deduction absorbs the earned income first, then any leftover reduces unearned income. In this example, all $1,200 of wages and $450 of interest are sheltered; the $1,550 that remains taxable is entirely investment income.
“Can Be Claimed” Is Enough
The restricted deduction applies if another taxpayer can claim you, whether they actually do or not. The IRS language is deliberate: “If you can be claimed as a dependent by another taxpayer, your standard deduction … is limited.”2Internal Revenue Service. Topic No. 551, Standard Deduction A parent who forgets to list a child, or decides not to, does not unlock the full standard deduction on the child’s return. If the dependency tests are met, the limitation applies.
The qualifying child tests are the usual trigger. A child generally qualifies if they are under 19 at year-end (or under 24 if a full-time student), lived with the parent for more than half the year, and did not provide more than half of their own support.3Internal Revenue Service. Dependents A qualifying relative covers other household members who earn below a gross income threshold and receive more than half their support from the taxpayer.
Taxable Scholarships Count as Earned Income
A detail that catches students off guard: taxable scholarship and fellowship amounts count as earned income when running the dependent standard deduction formula. Scholarship money spent on tuition, fees, books, and required supplies is generally tax-free. Amounts used for room, board, or personal expenses are taxable, and the IRS treats that taxable portion as earned income for this calculation.
This classification helps. A student with $5,000 of scholarship money allocated to room and board can add $5,000 to the earned income side, producing a deduction of $5,450 instead of the $1,350 floor. Treated as unearned income, the same money would produce a much smaller deduction.
When You Have to File at All
Having income does not automatically mean you have to file. For a dependent under 65 and not blind in 2026, filing is generally required if any one of these applies:
- Unearned income above $1,350.
- Earned income above $16,100.
- Gross income above the larger of $1,350 or earned income (up to $15,650) plus $450.
A dependent with $800 of interest and no wages stays under the unearned income threshold and owes no return. A dependent with $1,500 in dividends crosses the line and has to file even if the tax owed is small.1Internal Revenue Service. Rev. Proc. 2025-32 Even below the thresholds, filing is worth it if federal income tax was withheld from a paycheck, because filing is the only way to get that money back.
The Kiddie Tax Sits on Top
The Kiddie Tax is a separate rule that works alongside the dependent standard deduction. For 2026, a dependent child’s unearned income above $2,700 is taxed at the parent’s marginal rate instead of the child’s.4Internal Revenue Service. Instructions for Form 8615 The first $1,350 of unearned income is covered by the dependent standard deduction. The next $1,350 is taxed at the child’s own rate. Anything beyond $2,700 jumps to the parent’s bracket.
The Kiddie Tax reaches children who, at year-end, are:
- Under 18.
- Age 18 with earned income that did not cover more than half of their own support.
- A full-time student age 19 through 23 with earned income that did not cover more than half of their own support.
The child files Form 8615 with their Form 1040 to run the calculation. The form needs the parent’s taxable income, so parent and child have to coordinate.4Internal Revenue Service. Instructions for Form 8615
Age 65 or Blind Adds More
A dependent who is 65 or older or legally blind at the end of the tax year gets an additional standard deduction on top of the formula amount. For 2026, that add-on is $2,050 for an unmarried dependent and $1,650 for a married dependent.1Internal Revenue Service. Rev. Proc. 2025-32 A dependent who is both 65 or older and blind adds the amount twice.
You are not locked into the standard deduction at all. A dependent can itemize on Schedule A if qualifying expenses exceed the standard amount, though in practice few dependents have enough mortgage interest, state taxes, or charitable contributions to make itemizing pay off.