Filing Your Child’s First Tax Return: A Parent’s Guide
- By the dedicated team of editors and writers at Newsletter Station.
Filing a first income tax return can be an important milestone for a child or teenager who has started earning money. Whether your child has a part-time job, summer employment, freelance income, or investment earnings, the process can also be a valuable opportunity to introduce practical financial skills.
One important update from the original version of this article: tax filing requirements change from year to year, so the income thresholds from older tax years should not be used for a current return. For the 2025 federal tax year, for example, the IRS uses specific filing rules for dependents based on earned and unearned income.
Here's what parents and children should know when preparing a first federal income tax return.
Determine Whether Your Child Needs to File
The first step is determining whether your child is actually required to file a federal tax return.
The rules are different for dependents than they are for taxpayers who cannot be claimed as dependents. For 2025, a single dependent under age 65 who is not blind generally must file if their unearned income exceeds $1,350, their earned income exceeds $15,750, or their gross income meets the applicable IRS threshold based on earned and unearned income.
There can also be situations where filing is worthwhile even when your child isn't required to file. For example, if federal income tax was withheld from their paycheck, filing may allow them to receive a refund.
Because the thresholds can change annually, check the current IRS filing requirements before deciding whether your child needs to file.
Gather Your Child's Tax Documents
Before beginning the return, gather all of your child's income documents.
Depending on their circumstances, these might include:
Form W-2 for wages from an employer
Form 1099-NEC for certain self-employment or freelance income
Form 1099-INT for taxable interest
Form 1099-DIV for dividends
Form 1099-B or other brokerage statements for investment transactions
Records of other taxable income
Documentation for applicable deductions or tax credits
Don't assume that a child doesn't need to file simply because they didn't receive a W-2. Income from investments, self-employment, and other sources can create separate filing requirements.
Understand the Difference Between Earned and Unearned Income
This distinction is particularly important when filing a child's tax return.
Earned income generally includes money received for work, such as wages, salaries, and tips. Certain self-employment income may also fall into this category.
Unearned income can include taxable interest, dividends, capital gain distributions, and certain other types of investment or passive income.
A child with investment income may face additional tax rules that don't apply to a child who earns wages from a part-time job.
Remember That Your Child Can Still Be Your Dependent
Filing their own tax return does not automatically mean your child stops being your dependent.
A qualifying child can generally be under age 19 at the end of the tax year or under age 24 if a full-time student, provided the other dependency requirements are met. Those requirements include rules involving residency, support, and whether the child files a joint return.
Your child should answer the dependency questions accurately upon their return. Don't assume that filing independently means they should claim themselves.
Use the Correct Tax Form
For most individual taxpayers, including children who need to file, Form 1040 is the primary federal income tax return.
The older Forms 1040A and 1040EZ referenced in many older tax articles are no longer used. They were eliminated beginning with the 2018 tax year.
Depending on your child's income, they may also need additional schedules or forms. For example, certain children with substantial investment income may need Form 8615 to calculate the tax on their unearned income.
Be Aware of the "Kiddie Tax"
The term "kiddie tax" refers to special federal tax rules that can apply to certain children's unearned income.
For 2025, Form 8615 generally applies when a qualifying child has more than $2,700 of unearned income and meets the applicable age and support requirements. In those circumstances, some of the child's unearned income may be taxed using the parent's tax rate.
This can become particularly important for children with investment accounts, dividends, capital gains, or other unearned income.
If your child's tax situation involves significant investment income, consider getting professional tax advice.
Know About the Parent's Election for Certain Investment Income
In some situations, parents can elect to report a child's interest, dividends, and certain capital gain distributions on the parent's federal tax return instead of having the child file a separate return.
For 2025, Form 8814 may be used when the child meets specific requirements, including having only qualifying interest, dividend, and capital gain distribution income and gross income below $13,500.
This election isn't appropriate for every situation, so review the current IRS requirements carefully before choosing this approach.
Complete the Return Carefully
Whether you use tax software or work with a tax professional, review your child's return carefully before submitting it.
Double-check:
Your child's legal name
Social Security number
Address
Filing status
Dependency information
All sources of income
Federal tax withheld
Applicable deductions and credits
Banking information for direct deposit
A small error in a Social Security number or income amount can delay processing.
Decide How to File
Most taxpayers can choose between electronic filing and filing a paper return.
Electronic filing is generally faster and can reduce common mathematical or data-entry errors. The IRS also provides information about available free filing options for eligible taxpayers.
If your child is filing a return for the first time, take the opportunity to explain what they're submitting rather than simply completing everything for them.
Explain the Refund or Tax Due
A refund can be exciting when it's your child's first tax return, but it's also a useful opportunity to explain what a refund actually means.
If federal income tax was withheld from your child's paycheck and they ultimately owe less tax than was withheld, they may receive the difference as a refund.
On the other hand, your child could owe tax depending on their income and circumstances. Explain that owing money doesn't necessarily mean something went wrong—the amount of tax withheld during the year may have been insufficient.
Keep Copies of the Return
Encourage your child to keep a copy of their tax return and supporting documentation.
Good recordkeeping becomes increasingly important as financial responsibilities grow. Keeping tax records also makes future returns easier because previous returns may contain information needed for subsequent years.
Rather than treating tax documents as something parents handle behind the scenes, use the first return as an opportunity to teach your child how to organize and retain important financial records.
Turn a Tax Return Into a Financial Lesson
A child's first tax return is about more than checking a box with the IRS. It's an opportunity to introduce concepts such as income, withholding, refunds, investments, recordkeeping, and financial responsibility.
Parents can provide guidance while allowing their children to participate in the process. As they get older, gradually give them more responsibility for gathering documents, reviewing income, and understanding the final return.
Tax rules can be complicated, particularly when a child has investment income, self-employment income, or other sources of earnings. Current IRS guidance should always take precedence over older tax articles or general rules of thumb.
When in doubt, consult a qualified tax professional who can review your child's specific circumstances and help ensure the return is prepared correctly.
