(NEXSTAR) – Tax Day is April 18 and while there’s been a lot of talk about how your dependent children can help with your tax refund, they may need your help to recover their own money.
A child can be claimed as a dependent if they were under 19 for the entire tax year (or 24 if a full-time student), lived with you for more than half 2021 and you provide more than half of their financial support.
Dependent children who were employed in 2021 may still have to file their own taxes, even if you can claim them. If he earned $12,550 in income, your child will have to file a tax return, according to Marc Stebertax information manager for Jackson Hewitt Tax Services.
“If they had a job – big job, little job, new job, whatever – if there were tax deductions, they can’t get that money back unless they file a tax return,” Steber told Nextstar. “And so if your child worked during the summer and made $1,000 or $5,000 or whatever the number, chances are he had a tax deduction and that withholding tax authorities, federal and state, can’t get that money back unless they file a tax return.”
The same goes for all of your dependents who are in college, said Lisa Greene-Lewis, CPA and tax expert at TurboTax.
“Every year, [the IRS] brings in over $1 billion in unclaimed refunds and much of it belongs to students who don’t think they should file,” she explained.
If your child receives income from sources other than employment, such as interest, dividends, and other unearned income, the filing rules change. When the total of this income that your child received in 2021 exceeds $2,200, he may be subject to a specific tax, depending on the IRS.
If the only income your child had in 2021 is interest and dividend income, and the total is less than $11,000, you may be able to include that income on your return rather than filing a separate return. .
Ultimately, if you’re unsure whether your child should file their own return, Steber and Greene-Lewis suggest talking to a tax professional.