20yo child, fully supported, lived entire year in parent home. Earned 2500 and not a student. how do I report this?

Forum|Forum|3 years ago
April 7, 2023
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TurboTax Deluxe Online

DoninGA

Employee

You do not enter the child's earned income from work on your tax return.

If the child's income was from self-employment and not from wages reported on a W-2 and the income was $400 or more they are required to file a tax return using Schedule C for self-employment. When they file their return they Must indicate that they can be claimed as a dependent.

You can claim the child as a dependent under the Qualifying Relative rules if the child meets all the requirements.

To be a Qualifying Relative -

1. The person cannot be your qualifying child or the qualifying child of any other taxpayer. A child is not the qualifying child of any other taxpayer if the child's parent (or any other person for whom the child is defined as a qualifying child) is not required to file an income tax return or files an income tax return only to get a refund on income tax withheld.
2. The person either (a) must be related to you or (b) must live with you all year as a member of your household.
3. The person's gross income for the year must be less than $4,400 (social security does not count) in 2022
4. You must provide more than half of the person's total support for the year.
5. The person must be a U.S. citizen or a U.S., Canada, or Mexico resident for some part of the year.
6. The person must not file a joint return with their spouse.

Hal_Al

Employee

You do not report his/her income on your return. If it has to be reported, at all, it goes on his own return. I Your dependent must file a tax return for 2022 if he had any of the following:

Total income (wages, salaries, taxable scholarship etc.) of more than $12,950 (2022).
Unearned income (interest, dividends, capital gains, unemployment, taxable portion of 529 distribution) of more than $1150 (2022)
Unearned income over $400 (2022) and gross income of more than $1150 (2022)
Household employee income (e.g. baby sitting, lawn mowing) over $2300 ($12,950 if under age 18)
Other self employment income over $432, including money on a form 1099-NEC

Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.

In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.

If his only income is from interest and dividends, Alaska PFD or capital gains distributions shown on a 1099-DIV, there is a provision for entering it on your return, using form 8814.