Tax Rules for Claiming a Dependent Who Works

A young person works in a grocery store

When your dependent enters the workforce for the first time, you may find yourself wondering how their employment status affects your tax situation. Here are answers to common tax questions about claiming dependents who work. 

Can I claim my child as a dependent if they have a job? 

Your child can still be claimed as your dependent as long you are still supporting them financially.  

To be a qualifying child, your dependent must: 

  • Be related to you 
  • Be under 19 (or a full-time student under 24)  
  • Rely on you for more than half of their financial support 
  • Live with you for more than half of the year (exceptions apply – see the Relatives who don’t have to live with you section in IRS Publication 501)

In addition, you must be the only one claiming them as a dependent. If you share custody of the child, it’s important to know which of you will claim them as a dependent. 

Can I get the Child Tax Credit if my dependent has a job/earns income? 

As long as you are still providing more than half of their financial support, your child can still qualify for the Child Tax Credit. Of course, they must meet all the other requirements as well, which typically vary year to year. 

If your child doesn’t qualify for the Child Tax Credit, they may still qualify for a $500 credit for other dependents

Can I claim my child as a dependent if they are over 18? 

Your child can qualify as a dependent up to age 24 if they are enrolled full time as a student and meet all the other eligibility requirements. They must be related to you by blood, marriage, or adoption (in some cases, foster children may qualify as well).

Should my dependent file their own return? 

The income limits for dependents sometimes vary year to year. See the Filing Requirements for Dependents section of IRS Publication 501.

Read also: Taxes for Teens – A Beginner’s Guide 

Can I claim my child as a dependent if they file a tax return? 

Your child can still qualify as a dependent if they file their own taxes. They will need to indicate that someone else claims them as a dependent on their return. See how this is done in TaxSlayer

This article was last updated on 5/9/2022.

Related Posts