kendrick03
Level 1
This widget could not be displayed.

I have a client who is 14 and has unemployment income of 15K due to COVID and not being able to have a summer job. He did have taxes taken out and wants to file. His parents did not keep any of his money as the gave it to him. Is there a way to not apply the kiddie tax to his return? Applying the kiddie tax makes him owe which he has paid taxes on his income. I understand the theory behind kiddie tax but all of the income belongs to the teenager. 

My second question is what if he doesn't file? His return before kiddie tax applied would be 14.00

I hope I explained this correctly. 

Labels (1)
0 Cheers
sjrcpa
Level 15
This widget could not be displayed.

Kiddie tax applies. If he doesn't file, IRS computers match the 1099 for unemployment and send him a CP2000 notice.


ex-AllStar
IRonMaN
Level 15
This widget could not be displayed.

$15K of unemployment for a 14 year old kid?  Another example of how the system worked so well. 

I'm keeping this job. But I am selling surplus anvils on the side. If you are interested please call 867-5309
Accountant-Man
Level 11
This widget could not be displayed.

<<His return before kiddie tax applied would be 14.00>> No, his REFUND might be $14.00, but his RETURN is a 1040.

He doesn't get to choose whether or not he WANTS to file. He files because he should file.

** I'm still a champion... of the world! Even without The Lounge.