Babies And Tax Returns: A Real (If Unlikely) Pair

The IRS doesn’t discriminate on the basis of age, not even babies. It’s one of those things that sound funny but it’s actually true; a baby (technically, a dependent child of any age) must file a tax return if they earn more than $15,000 in certain types of income. 

Can a Baby File for Income Tax Return?

It’s likely that any parent will wonder about how long it will be until their children have to start paying taxes just like they do, but we bet that few imagine just how soon that can be; in fact, it can be even before they take their first steps.

Tax implications for children begin as soon as they receive income from investments, gifts, or even small jobs like, say, acting in commercials. It’s definitely something that sounds unusual for the average taxpayer, but there are plenty of cases where a baby might need to file a tax return.

Understanding when and why filing a tax return becomes necessary for a child can, as a patent, navigate those tax responsibilities effectively. In this guide, we will break down whether a baby can file for an income tax return, what the IRS requires, and what parents should consider when handling their child’s taxes.

When Does a Baby Need to File a Tax Return?

The IRS sets income thresholds that determine whether a tax return is necessary. A baby typically needs to file a return if:

• They have earned income exceeding the IRS minimum threshold (e.g., from modeling or acting jobs).
• They have unearned income (such as dividends, interest, or capital gains) above the set limit, which is $1,250 for 2024.
• They had taxes withheld and may be eligible for a refund.
• They owe self-employment tax on earnings over $400.

While most babies won’t meet these conditions, those with substantial investment income or specific earnings may require tax filing.

How Parents Can Report a Baby’s Income

Instead of filing a separate tax return for a baby (which we agree can be a little off-putting for some), parents may have the option to report the child’s unearned income on their own return using IRS Form 8814, Parents’ Election to Report Child’s Interest and Dividends.

By reporting their baby’s (or any other child’s) income on their own Form 1040, you as a parent could simplify the tax process by a lot, but there are limits. Here are the specific conditions that must be met before this option is available to you:

Unearned Income Only

The only type of income you can report using this method is unearned income—those include interest from a savings account, dividends from stocks, or capital gains distributions.

If a child has earned income (which is rare for a baby, obviously, but could apply in certain situations, such as child actors or influencers earning wages), Form 8814 cannot be used, and a separate tax return must be filed for them.

Límites de ingresos

There are several limits in place for how much income a child can receive before you can no longer report their income on your tax return, and must file a separate return for them instead. For the 2024 tax year, this limit on unearned income is $12,500, and $14,600 of earned income.

If the child’s unearned income exceeds the aforementioned amounts, you as a parent cannot use Form 8814 and must file a separate return for the child instead.

However, if the income remains under those limits, reporting it on your own return can save you time (and probably a headache) from doing all that additional paperwork and separate filings.

Other Factors to Consider When Reporting a Child’s Income

Filing your child’s income on your tax return might sound like a good idea at first because it can streamline tax reporting. Still, there are potential downsides that you would be wise to consider.

First of all, parents that elect to include their child’s income on their return must know that, if they elect to report their children’s income on their own return, that amount is taxed at their tax rate rather than the child’s typically lower rate.

This means that in cases where the parents fall into a higher tax bracket, the income may be subject to a greater tax burden than if it were reported separately under the child’s own tax bracket.

This taxation is part of the Kiddie Tax rules, which were implemented to prevent parents from shifting investment income to their children to take advantage of lower tax rates.

How to File a Tax Return for a Baby

If a baby does need to file a tax return, parents or guardians will typically follow these steps:

1. Obtain an SSN or ITIN: The baby must have a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) before they can file a tax return (well, before you do it for them, you know what we mean). Since this is usually issued at birth, it shouldn’t pose a problem for most, but if it wasn’t, parents can apply through the Social Security Administration or IRS.
2. Gather Relevant Documents: If the baby has investment accounts, parents relevant tax documents such as IRS Form 1099-INT or 1099-DIV that report interest or dividends. And, if the baby had earned income to report as well, they should also collect the necessary W-2 forms.
3. Choose the Appropriate Form: In most cases, all that the child will require is Form 1040 for federal tax filing. If the parents are reporting the child’s income on their return instead, IRS Form 8814 should be used.
4. Calculate Tax Liability: Calculating how much your child’s taxable income will be is not as straightforward as it may sound, since the Kiddie Tax rules may apply and your child’s unearned income above a certain threshold will be taxed at the parent’s (meaning your) tax rate.
5. Complete the Tax Return: Once you’ve collected all necessary documents, verified all the relevant information, and calculated your child’s tax liability, it’s time to complete the form, ensuring the baby’s information is correctly entered. This can be done electronically through the IRS e-file system or mailed directly to the IRS.
6. Check For Refunds: In case any of the baby’s or child’s income was withheld, then by filing a tax return they might be eligible for a refund. The refund might be especially substantial if taxes were withheld on investment income.

Potential Tax Benefits for Babies

Now that you’re over the shock of learning that your baby has to pay taxes, maybe the fact that doing so brings some benefits will serve as consolation. These benefits include:

Reembolsos de impuestos

If a qualified child (including babies, of course) has earned income such as interest from a savings account or investments, and taxes were withheld, then filing a return could result in a  tax refund. Granted, most babies do not have significant income for obvious reasons, but some financial accounts set up in their name may generate taxable earnings.

Crédito fiscal por hijos (CTC)

The CTC might reduce the tax liability for parents of a qualified child by up to $2,000 per child. What’s more, a portion of the credit is refundable. Remember, the CTC is designed to help offset the costs of raising a child and can provide significant tax savings for parents.

Education Savings Benefits

Contributions to certain education savings accounts—such as the 529 Plan or Coverdell Education Savings Accounts (ESAs)—may offer tax advantages. Right now you’re probably thinking, “I can believe a baby paying taxes, but going to college is out of the question!”, and you’d be right!

Still, while these plans do not directly impact a tax return for a baby, they allow earnings to grow tax-free and provide potential state tax deductions or credits for contributions, helping families save for future education expenses.

Crédito Fiscal por Ingresos Ganados (EITC)

Any parent that meets the income requirements, having a qualifying child (again, yes, that’s babies) may make them eligible for the EITC, which is a refundable credit designed to support low-to moderate-income families offset the costs of raising a family.

This credit can increase the overall tax refund that you’d normally get, and provide additional financial relief.

The Final Word On Babies Filing Income Tax Returns…

Most babies will not need to file a tax return, but in certain situations—such as earning investment income above IRS limits or working in entertainment—filing may be necessary. Parents should be aware of IRS thresholds, potential tax benefits, and options for reporting income. When in doubt, consulting a tax professional can help ensure compliance with IRS regulations while maximizing any potential tax advantages.

Can a Baby File for Income Tax Return?: FAQ

1. Can a baby file a tax return on their own?
Funny as it might be to imagine, the answer is no: A baby cannot file a tax return independently. It is the responsibility of a parent or legal guardian to file on the baby’s behalf if required. The filing party is also able to report the baby’s income as part of their own return to get tax benefits and even qualify for some credits.

2. How much income requires a baby to file a tax return?
For the 2024 tax year, a baby must file a tax return if they have over $1,250 in unearned income or if they have earned income above the standard deduction limit. The IRS also treats children differently as taxpayers depending on how they make their money (through work or investments), so check which regulations apply to each to be on the safe side.

3. Can parents report their baby’s income on their own tax return?
Yes, if the baby only has unearned income from investments, parents can use IRS Form 8814 to report it on their own return, avoiding a separate filing. To do so, they must be a qualifying child, and their income is less than $13,500 as of 2025.

4. What happens if a baby has taxes withheld?
If a baby has had taxes withheld, filing a tax return can allow them to receive a refund if they qualify.

5. Does a baby need an SSN to file taxes?
Yes, they do.  Just like any other taxpayer, a baby must have a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) to file a tax return. In fact, they need pretty much everything you do to file their taxes, such as proper documentation backing their deduction claims and a proper record of their investment income in case the IRS decides to audit.

6. What if a baby earns money from acting or modeling?
That depends on how much the baby earns from the job in question. For example, if a baby earns money from jobs such as acting or modeling, they may need to file a return if their earnings exceed the IRS threshold for taxable income.

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