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Is It Necessary for My Child to Submit a Tax Return? Here’s the Lowdown:

Many people have been talking about how much the Child Tax Credit will affect their tax returns this year as tax season approaches. You may be able to help your dependent children obtain a tax refund, too, while you help yourself.

It is possible to claim a child as a dependent if they were under the age of 19 (or 24 if they were a full-time student) during the entire tax year if you provided more than half of their financial support. It is the responsibility of all adults, not just those who cannot be claimed as dependents, to file their taxes.

Even if you’re able to claim your children as dependents, they may still have to file their own taxes in 2021. According to Jackson Hewitt Tax Services’ chief tax information officer, Mark Steber, your child will need to file a tax return if they made $12,550 in income.

When it comes to tax withholdings, it doesn’t matter if they had a large or little employment, new or old,

“if it had tax withholdings, they can’t get that money back until they file a tax return”

Unless they file an income tax return, your child won’t be able to obtain their tax withheld earnings back if they worked over the summer and earned $1,000 or $5,000 or whatever the number is.

Also Read :-

Last Year, Several Parents Took Advantage of the Child Tax Credit to Start Their Own Enterprises.

All the Information You Need to Know About Child Tax Credits and Stimulus Money

How to Do Your Taxes if You’ve Received a Child Tax Deduction

Your dependents who are in college are also exempt from paying taxes, according to Lisa Greene-Lewis, a CPA and tax specialist at TurboTax. Each year, the Internal Revenue Service (IRS) reports more than $1 billion in unclaimed refunds, the majority of which belong to college students who don’t believe they should pay their taxes, according to her.

The procedures for paying taxes alter if your child receives money from sources other than a job, such as interest, dividends, and other unearned income. According to the IRS, if your child’s total income in 2021 exceeds $2,200, they may be liable to a special tax.

Including your child’s interest and dividend income on your tax return in 2021 may save you from having to file a separate return for your child’s income.

Both Steber and Greene-Lewis recommend consulting a tax professional if you’re unsure if your child should file their own return.