A child who earns money is subject to the same federal tax rules as an adult, and the filing requirements for kids’ taxes turn on the type of income, not the child’s age. For the 2026 tax year, a dependent child with only wages must file once earned income exceeds $16,100, a child with only investment income must file once that income exceeds $1,350, and any child with $400 or more in self-employment earnings must file regardless of the totals.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 The wide gap between the wage threshold and the investment threshold is what catches most families by surprise.
When Your Child Must File
Three separate triggers can each independently require a dependent child to file a 2026 return:
- Earned income (wages, salary, tips) above $16,100. That figure matches the standard deduction for a single filer, so earnings up to that amount are effectively sheltered from federal income tax.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
- Unearned income (interest, dividends, capital gains) above $1,350.2Internal Revenue Service. Check if You Need to File a Tax Return
- Both types combined, when gross income exceeds the larger of $1,350 or earned income (up to $15,650) plus $450.3Internal Revenue Service. Publication 501 – Dependents, Standard Deduction, and Filing Information
A child who falls under all three thresholds can still benefit from filing. If an employer withheld federal income tax from a teenager’s paycheck, the only way to recover it is to file a return and claim a refund. A summer job that paid $4,000 generates no tax liability, but any withholding shown on the W-2 stays with the Treasury until the child files for it back.
How the Standard Deduction Works for a Dependent
A dependent’s standard deduction does not automatically match the full amount other single filers get. It follows a formula: the greater of $1,350 or the child’s earned income plus $450, capped at the regular single standard deduction of $16,100.3Internal Revenue Service. Publication 501 – Dependents, Standard Deduction, and Filing Information
The practical effect: a teenager earning $6,000 from a part-time job gets a $6,450 deduction, while a child whose only income is $800 in interest gets only the $1,350 floor. The deduction scales with earned income. Unearned income gets no additional shelter beyond the base amount, which is why investment earnings hit the filing threshold so much sooner.
The Kiddie Tax on Investment Income
The kiddie tax exists to stop parents from shifting investment assets into their children’s names to enjoy a lower rate on the returns. Codified in IRC Section 1(g), it works in three tiers for 2026:4Office of the Law Revision Counsel. 26 U.S. Code 1 – Tax Imposed
- The first $1,350 is tax-free, covered by the dependent’s standard deduction.
- The next $1,350 is taxed at the child’s own rate, usually in the lowest bracket.
- Unearned income above $2,700 is taxed at the parent’s marginal rate, which can be dramatically higher.5Internal Revenue Service. Topic No. 553, Tax on a Childs Investment and Other Unearned Income (Kiddie Tax)
The rules cover children under 18, 18-year-olds whose earned income doesn’t cover more than half their own support, and full-time students under 24 in the same situation.5Internal Revenue Service. Topic No. 553, Tax on a Childs Investment and Other Unearned Income (Kiddie Tax) An 18-year-old with a full-time job covering more than half their living costs escapes these rules even if they still hold investment accounts.
When unearned income tops $2,700, the child’s return must include Form 8615, which computes the tax at the parent’s rate and requires data from the parent’s own return, including filing status and taxable income.6Internal Revenue Service. Instructions for Form 8615 – Tax for Certain Children Who Have Unearned Income If the parent hasn’t filed by the child’s deadline, the IRS allows a reasonable estimate, though requesting an extension with Form 4868 is safer.
Reporting the Child’s Income on Your Own Return
For smaller amounts of investment income, parents have a shortcut. Using Form 8814, you can elect to report your child’s interest and dividends directly on your own return and skip filing for the child entirely. The election is available when the child’s gross income consists only of interest and dividends, totals more than $1,350 but less than $13,500, and the child meets the kiddie tax age rules.7Internal Revenue Service. Instructions for Form 8814 – Parents Election to Report Childs Interest and Dividends
The convenience comes with a cost. The first $1,350 remains tax-free, but the next $1,350 is taxed at your rate rather than the child’s lower rate. For a parent in the 24% bracket with a child who would otherwise owe 10%, the difference adds up. The election tends to be worth it only when the child has a few hundred dollars in bank interest and a separate return isn’t worth the trouble.
Self-Employment Income Changes the Math
Kids who earn money outside traditional employment face a much lower filing threshold. Babysitting, lawn care, tutoring, selling crafts online, and earning revenue through social media all count as self-employment income. Once net earnings hit $400, the child must file, whether or not any income tax is owed.8Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
Self-employment tax covers both the employer and employee shares of Social Security and Medicare at a combined 15.3%: 12.4% for Social Security on earnings up to $184,500 and 2.9% for Medicare on all net earnings with no cap.9Social Security Administration. Contribution and Benefit Base A child who nets $2,000 mowing lawns owes roughly $306 in self-employment tax even though their income sits well below the $16,100 income tax threshold. That’s the mistake families make every year: assuming one number covers every type of income.
Business expenses reduce self-employment income before the tax applies. A teenager who earns $1,200 from a lawn care business but spends $500 on gas, mower maintenance, and supplies owes self-employment tax on only $700. Keep receipts and a simple log of expenses.
Children Working in a Family Business
Families running a sole proprietorship, or a partnership where both partners are parents of the child, get a valuable payroll tax break. Wages paid to a child under 18 working in the family business are exempt from Social Security and Medicare taxes.10Internal Revenue Service. Tax Treatment for Family Members Working in the Family Business The child still reports the income on their own return, but no one owes the 15.3% that would normally apply.
The exemption is limited: it does not apply if the family business operates as a corporation or an LLC taxed as a corporation. The work also has to be real, and the pay reasonable for the work performed. Filing papers, stocking inventory, answering phones, and helping with deliveries all qualify. A parent paying a 14-year-old $50 an hour to sweep the shop floor is inviting an audit.
When the child’s total wages from the family business stay under $16,100, the standard deduction wipes out their income tax, and the FICA exemption removes the payroll tax as well. The family effectively moves money from a parent’s higher bracket to the child’s zero-tax bracket.
Roth IRA Opportunity When a Child Has Earned Income
Any child with earned income can contribute to a Roth IRA, at any age. The 2026 limit is $7,500 or the child’s total taxable compensation for the year, whichever is less.11Internal Revenue Service. Retirement Topics – IRA Contribution Limits A child who earned $3,000 from a summer job can contribute up to $3,000. The money goes in after tax, grows tax-free, and can eventually be withdrawn in retirement tax-free.
Because most minors can’t open a brokerage account on their own, a parent usually opens a custodial Roth IRA and manages it until the child reaches adulthood (18 or 21, depending on the state), at which point control transfers. Anyone can fund the contributions as long as the child has at least that much in earned income. A grandparent handing a teenager $3,000 for a Roth IRA is fine, provided the teenager actually earned $3,000 or more during the year.
Allowance and gift money do not count as earned income, so the child needs documented wages or self-employment earnings to qualify.
Forms, Documents, and the Deadline
Which forms your child needs depends on the type of income:
- Form 1040 is the standard individual return, used for all filers including minors.12Internal Revenue Service. About Form 1040, U.S. Individual Income Tax Return
- Form 8615 is required when unearned income exceeds $2,700 and the kiddie tax applies.6Internal Revenue Service. Instructions for Form 8615 – Tax for Certain Children Who Have Unearned Income
- Form 8814 is used when parents elect to include the child’s interest and dividends on their own return.7Internal Revenue Service. Instructions for Form 8814 – Parents Election to Report Childs Interest and Dividends
- Schedule SE is required for self-employment income of $400 or more.8Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
Gather supporting documents before starting: W-2 forms from employers, Form 1099-INT for bank interest, Form 1099-DIV for dividends, and Form 1099-NEC or 1099-K for freelance or platform-based income.13Internal Revenue Service. About Form 1099-INT, Interest Income For self-employed kids who don’t receive a 1099, keep a record of each job: the date, the client, the work performed, and the amount paid.
The deadline for a child’s 2026 federal return is April 15, 2027, the same as every other individual filer. If that date falls on a weekend or holiday, the deadline shifts to the next business day.14Internal Revenue Service. When to File A child who can sign their own name should sign the return. When a child is too young to sign, a parent or guardian signs the child’s name followed by “By [parent’s signature], parent for minor child.”3Internal Revenue Service. Publication 501 – Dependents, Standard Deduction, and Filing Information Electronic filing handles this through the software’s identity verification process, and children’s returns almost always fall under the IRS Free File income threshold.