Return Filing

A dependent must file a return if all of his or her income is earned income and is above certain amounts.  And some dependents may have to file a return even if their income is below the amount that would normally require them to file.

The information below explains whether a dependent must file a 2010 return.

Single dependents - Were you either age 65 or older or blind?

No. You must file a return if any of the following apply:
1. Your unearned income was more than $950.
2. Your earned income was more than $5,700.
3. Your gross income was more than the larger of:
a. $950 or,
b. Your earned income (up to $5,400) plus $300.

Yes. You must file a return if any of the following apply:
1. Your unearned income was more than $2,350 ($3,750 if 65 or older and blind).
2. Your earned income was more than $7,100 ($8,500 if 65 or older and blind).
3. Your gross income was more than the larger of:
a. $2,350 ($3,750 if 65 or older and blind), or
b. Your earned income (up to $5,400) plus $1,700 ($3,100 if 65 or older and blind).

Married dependents - Were you either age 65 or older or blind?

No. You must file a return if any of the following apply:
1. Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
2. Your unearned income was more than $950.
3. Your earned income was more than $5,700.
4. Your gross income was more than the larger of:
a. $950, or
b.  Your earned income (up to $5,400) plus $300.

Yes. You must file a return if any of the following apply:
1. Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
2. Your unearned income was more than $2,050 ($3,150 if 65 or older and blind).
3. Your earned income was more than $6,800 ($7,900 if 65 or older and blind).
4. Your gross income was more than the larger of:
a. $2,050 ($3,150 if 65 or older and blind), or
b. Your earned income (up to $5,400) plus $1,400 ($2,500 if 65 or older and blind).

In addition, a dependent must file a return if:

• Any taxes are owed:
  
  • Social Security and Medicare taxes on tips not reported to employer
  • Uncollected Social Security and Medicare or railroad retirement taxes on tips not reported to employer or group-term life insurance
  • Alternative minimum tax
  • Recapture taxes
  • Taxes on qualified plans, including IRAs or other type of tax-favored plan

• The dependent received any of the following:
  • Advance earned income credit payments from employers
  • Wages of $108.28 or more were earned from a church or church organization that is exempt from employer Social Security or Medicare taxes
  • Net earnings from self-employment was at least $400

Even if not required to file, a dependent should file if:

• Income tax was withheld from the dependent's income
• The dependent qualifies for a refundable credit:
  • Earned income credit
  • Additional child tax credit
  • Health coverage tax credit
  • Refundable credit for prior-year minimum tax
  • First-time homebuyer credit
  • Refundable American Opportunity Credit

Responsibility to File

The child is responsible for filing his or her own tax return and for paying any tax, penalties and interest. If the child cannot file his or her own return due to age or any other reason, the parent or guardian is responsible for filing the return on the child's behalf.

If the child cannot sign his or her own tax return the parent can sign the child's name and add his or her own signature, notating the return was signed "By parent or guardian for minor child." If a parent or guardian signs the return, that person is authorized by the IRS to represent the child in all matters related to the tax return.

On federal income tax returns, any income a child receives in return for personal services or labor counts as the child's income, even if state law provides that the parent is entitled to the income.

Standard Deduction

The standard deduction for an individual who can be claimed as a dependent of another taxpayer is the greater of:

• $950
• Earned income plus $300, not to exceed the regular standard deduction ($5,700)

In some circumstances, the standard deduction is not allowed:

• A married dependent filing a separate return, where his or her spouse itemizes deductions
• A dependent who files a return for a period of less than 12 months due to a change in accounting period
• A nonresident or dual-status alien dependent, unless the dependent is married to a citizen or resident alien and chooses to be treated as a U.S. resident for the year

A person who can be claimed as a dependent on another taxpayer's return cannot claim his or her own exemption, even if the person who can claim the dependent chooses not to.

For more information, see IRS Publication 929.