Does a Minor Need to Pay Taxes If They Have a Job?

The Internal Revenue Service is very broad-minded when it comes to taxes: they will collect from just about anyone with a job, including young people working to earn some spending money. How much minors must pay and whether or not they have to file tax returns depends mainly on how much they earn and their filing status.

Payroll Taxes

When a minor gets a job, her employer is required to deduct Social Security and Medicare taxes from her paycheck. That’s because these taxes are paid on all earned income, even if the amount is small. If she earns enough money, she will have federal income tax and possibly state and local income taxes deducted as well. She can claim exemption from income tax payroll deductions only if she earned no more than $950 the previous tax year and expects to earn no more than $950 in the current year.

Dependent Minors

Most minors are claimed as dependents by a parent or some other person. A dependent minor doesn’t get a personal tax exemption. That tax deduction goes to the person claiming him as a dependent. Unless he has other tax deductions, he will probably owe some federal income tax if he earns over $5,800, as of 2012. For this reason, the IRS stipulates that a dependent minor must file a tax return if he makes over $5,800 or if he has $950 in unearned income. The threshold amount changes from year to year. IRS Publication 17, “Your Federal Income Taxes,” lists current figures.

Non-Dependents

Occasionally a minor isn’t claimed as a dependent. Since non-dependents get personal exemptions, she usually does not owe taxes or have to file a tax return unless she earns at least $9,500 as of 2012. Whether a minor is a dependent or not, she also has to file a tax return and pay Social Security and Medicare taxes on self-employment income of $400 or more, even if her total earnings aren’t otherwise enough to make filing mandatory.

Considerations

When a taxpayer, including a minor, owes uncollected Social Security or Medicare taxes, he must file a tax return and pay the amount due. This is also the case if he received taxable disbursements from a tax-advantaged account such as an IRA. Sometimes it’s worthwhile to file a return voluntarily. A minor may have a refund coming because his employer withheld payroll taxes. The only way to get that refund is to file a tax return.

About the Author

Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.