Eligibility, filing rules, and kiddie tax

A dependent may be either a qualifying child or qualifying relative. Both types have unique rules, but some requirements are the same for both.

Tests for ALL dependents:

• Citizenship
• Relationship or member of household
• Joint return
• Gross income
• Support

Tests for qualifying children:

Citizenship or Resident: The claimed dependent must be a U.S. citizen, a U.S. resident, a resident of Mexico or Canada, or an adopted child who has lived with the taxpayer for the entire year.

Relationship: Son, daughter, grandchild, stepchild, brother, sister, half-brother, half-sister, stepbrother, stepsister, niece, nephew, adopted child. The child under 19 at the end of the tax year. For the American Opportunity credit, a full-time student under age 24 at the end of the tax year, or for the Earned Income Credit, any age if permanently and totally disabled at any time of the year.

Member of Household: The child or certain qualifying relatives must have lived with you for more than half the tax year. Your home is any home where they regularly live; it does not have to be a “traditional" home. NOTE: A child who was born or died during the tax year is treated as having lived with you all year if your home was the child’s home for the entire time he/she was alive.

Gross Income: A qualifying child, relative, or other individual’s gross income must be less than the exemption amount. For tax year 2025, the exemption amount is $5,200. The exemption amount is indexed for inflation each year. Gross income does not include nontaxable Social Security benefits, other federal nontaxable income, and Temporary Assistance to Needy Families (TANF) benefits. The gross income limit applies to qualifying relatives, not qualifying children. There is no gross income limit for a qualifying child as long as they do not provide more than half of their own support.

Joint Return Test: A married taxpayer who files a joint return, who cannot be claimed by someone else unless the joint return is filed strictly to claim a refund, and there would be no tax liability for either spouse if they had filed separate returns.

Example:

A married couple lives with one of the spouses’ parents. The parents pay practically all of the expenses of keeping up the home. One or both spouses earned $2,000 in wages from a part-time job at a fast-food restaurant.

Support test: The taxpayer must have provided at least half of the person’s total support for the entire year, including food, shelter, and clothing. TANF, SNAP, and housing provided by the state also qualify. The support test considers all income, taxable and nontaxable. If the potential qualifying dependent is employed and has used a significant amount of his/or her money for their own support (example: put their earnings in a savings or other investment account), the money does NOT count as being spent toward household support.

Other dependents

A child, grandchild, stepchild, niece, nephew, or relative must have lived in your home for more than half the tax year. Cousins, in-laws, and unrelated individuals must have lived with you in your home for the entire year to qualify as your dependent if they meet the other tests. Parents do not have to meet the member of household test to qualify as your dependent. Your home is any home where they regularly live; it does not have to be a “traditional" home.
There are special rules for dependents who receive support from multiple sources and for children of divorced or separated parents. See Form 2120 for more details.

The following section continues with additional dependency and filing considerations.

Returns of dependents

Someone who can be claimed as a dependent by another taxpayer has a standard deduction of the larger of a) his or her earned income plus $350 or b) $13,850. Any amount above that the taxpayer will be taxable income.

A dependent child with both earned and unearned income must file a 2025 tax return if any one of the following conditions applies:

• Earned income is higher than $15,750
• Unearned income is higher $1,350
• Earned income plus unearned income is more than the greater of $1,350 or earned income plus $500 (up to $15,000)

Example:

Lorrie, a dependent child, has $3,700 earned income and $500 unearned income. Lorrie’s total income is $3,400. Lorrie must file an income tax return because her total income ($4,200) is greater than the earned income plus $500 ($3,400).

Dependent Category	Gross Income Limit/Rule
Qualifying Relative	Gross income must be less than the IRS limit. 2025: Less than $5,200. 2026: Less than $5,300.
Qualifying Child	Income is limited to the regular standard deduction amount, provided the child does not provide more than half of their own financial support for the year.

Reporting a child’s investment on a parent’s tax return

Form 8814 is used by parents to report a child’s investment income on their tax return. In contrast, Form 8615 is required when a child’s investment income is high enough to necessitate filing their own tax return. Form 8615 calculates and reports the tax due on the child’s investment income.

Kiddie tax

Some children who have less than $2,700 of unearned income who are dependents under the age of 19 (under 24 if a full-time college student) are taxed at the child’s tax rate. Any unearned income above $2,700 is taxed at the parent’s tax rate. The threshold amounts are indexed for inflation each year. Refer to Form 8615 and the instructions for Form 8615 for more details.

Parents can elect to report their child’s interest and dividends, a.k.a. “the kiddie tax,” which applies to most unearned income that a child has received, but does not apply to a child’s salary or wages.

In 2025, unearned income under $1,350 qualifies for the standard deduction under the kiddie tax law. For more information, you can view Form 8814 and the instructions for Form 8814.