Should you file a tax return for your child?

There are five situations where a federal tax return is needed for your dependent child:

1. If your child receives a 1099 showing non employee compensation over $400, a return is needed because self employment tax is due.
2. W-2 wages over $12,000
3. Dividends, interest, and capital gains over $1,050
4. Gross income greater than the larger of $1,050 of unearned income or wages up to $11,650 plus $350
5. Your child had federal withholding on his W-2 and you want to get it refunded.

In certain circumstances a child's income can be reported on the parent's return but it is usually better to file a separate return.