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Resources > Financial Literacy > Can I Claim My Child as a Dependent if They Work—Rules & Qualifications

Can I Claim My Child as a Dependent if They Work—Rules & Qualifications

Claiming your children or relatives as dependents on your tax return is a great way to reduce your taxable income and become eligible for certain credits and deductions. However, there are strict requirements your child or a relative must meet if you want them to be your dependent. 

Rigorous rules often lead to situation-specific questions parents need to clear up so they can properly file taxes. Still, the most popular question parents tend to ask is, “Can I claim my child as a dependent if they work?” In this guide, we’ll reveal the answer and provide additional information on rules and qualifications for claiming a dependent on your tax return.

What Is a Dependent?

A dependent is someone who you can claim on your tax return, and they’re generally a person who relies on you for financial support in covering expenses like food, housing, and other necessities. This typically includes your children or relatives, but it can also include people you’re not directly related to, such as your spouse. Your dependent must fall into one of two categories:

  1. A qualifying child
  2. A qualifying relative

Claiming your child or a relative as a dependent on your tax return can help you reduce the amount of income tax you must pay. This is called a dependency exemption, and each dependent you claim will decrease the amount of income you owe taxes on.

Can You Claim Your Child as a Dependent if They Work?

You can claim your child as a dependent under the qualifying child rules even if they work, but they must meet some of the following requirements issued by the IRS:

  • Being under the age of 19
  • Being a full-time student under the age of 24
  • Having U.S. citizenship or being a resident alien and having a Social Security number (SSN)
  • Being your biological, adopted, or foster child
  • Relying on you for more than half of their financial support
  • Having lived with you for more than half of the year (with exceptions, like studying out of state)
  • Not filing a joint tax return (if your dependent is married)
  • Being permanently and totally disabled (regardless of age)

Can I Claim My 18-Year-Old as a Dependent if They Work?

Yes, you can. If your child is younger than 19, you can still claim them as a dependent even if they earn an income. As long as your child relies on you for more than half of their living expenses, such as food, housing, and medical care, their employment status won’t impact their ability to be your dependent.

How Much Money Can a Child Make and Still Be Claimed as a Dependent?

You can claim a qualifying child as a dependent regardless of how much they earn if they don’t provide more than half of their financial support. However, if you claim your child as a dependent under the qualifying relative rules, their gross income mustn’t exceed $5,050 for the 2024 tax year.

What Age Do I Stop Claiming My Child on Income Tax?

You can no longer claim your child as a dependent under the qualifying child rules if they’re older than 18 or 23 for full-time students (disabled children are exempt from the rule). You may also stop claiming your child on tax income if you don’t pay for half their financial support or they no longer live with you, even if they meet the age requirements.

You can continue claiming your child as a dependent after they turn 19 or 24 if they meet the requirements for qualifying relative dependents, such as:

  • Not being a qualifying child of any other taxpayer
  • Earning a gross income lower than $4,300 per year
  • Having more than half of their financial support provided by you

Is Claiming Someone Else’s Child on Income Tax Possible?

You can’t claim someone else’s qualifying child as your qualifying relative. What’s more, you can’t claim anyone as a dependent if another person can claim you as a dependent. Still, if the child you want to claim as a dependent is your relative (for example, your nephew or a niece), they can be your dependent if they meet the qualifying relative requirements.

Why Claim Your Child as a Dependent?

Claiming your child as a dependent can bring benefits beyond tax reduction. You may qualify for different types of credit that serve as financial support and come with specific qualification rules. The most popular credit options include:

  1. Earned income tax credit
  2. Child tax credit
  3. Education credits 

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is a refundable tax credit for low- and moderate-income workers and families. If you qualify, you can use it to reduce the taxes you owe and potentially increase your tax refund in case the credit amount is higher than the taxes owed. You don’t need to have children to receive the credit, but the credit amount is typically higher if you have qualifying children.

Child Tax Credit

The Child Tax Credit provides you with a tax break of up to $2,000 per qualifying child under the age of 17. You can claim this credit for each qualifying child with an SSN that’s valid for employment in the U.S. For the tax year 2023, some of the rules for qualifying as a child dependent include the following:

  • Your child must be younger than 17 at the end of the year
  • They must be your biological child, foster child, or stepchild
  • The dependent must not provide more than half of their financial support
  • Your child must be properly claimed as your dependent on your tax return

You qualify for the full credit amount for each qualifying child if you meet all eligibility requirements and your annual income is less than $200,000 or $400,000 if filing a joint return.

Education Credits

An education credit helps you cover the cost of higher education by reducing the tax owed on your tax return. If your tax is reduced to less than zero after receiving the credit, you may get a refund. There are two education tax credits available:

  1. The American Opportunity Tax Credit (AOTC)
  2. The Lifetime Learning Credit (LLC)

The rules for receiving educational credits state that you, your dependent, or a third party must be responsible for paying qualified higher education expenses. The student must also be enrolled in an eligible educational institution and listed on your tax return. If you can’t meet all three requirements, you won’t be eligible for these credits.

The Importance of a Good Credit Score for a Dependent Child

Even if you’re claiming your child as a dependent, you should make sure that they can establish a good credit history of their own, especially if they currently only have a low-income job. A strong credit profile can ensure a bright financial future for your child, helping them find better job opportunities and obtain loans for housing and a vehicle. Plus, helping your child establish a strong credit score can help them secure college loans with favorable terms and interest rates.

A great way to kickstart your child’s credit building journey is with the help of services like FreeKick. This platform provides a simple solution through parent-sponsored credit building for children as young as 13.

FreeKick—The Best Solution for Credit Building and ID Protection

FreeKick is a service provided by Austin Capital Bank that offers parent-sponsored credit building for minors and young adults between the ages of 13 and 25. The platform also helps you protect your whole family from identity theft by providing comprehensive identity monitoring and protection services for up to two adult parents and six children.

Start Building Credit Early With FreeKick

An early start at credit building can help your child establish a good credit profile and ensure a strong financial foundation. With a solid credit profile, your child can save over $200,000 during their lifetime because they’ll be able to get more favorable loan terms and other helpful benefits.

FreeKick offers a simple solution to help your child start their credit building journey as early as the age of 13. Here’s how to get started:

  1. Create an Account—Visit FreeKick.bank and choose a plan that best fits your needs and budget
  2. Set It and Forget It—Once the account is activated, your child’s credit will automatically start building over the next 12-month period
  3. Keep Growing—When the initial 12 months pass, you can either close the account and get your full deposit back or renew it and keep building your child’s credit

Keep Your Identity Protected With FreeKick

In addition to helping your child build credit, you need to safeguard their credit profile from identity criminals. One of the main reasons for this is the fact that a child’s identity is stolen every 30 seconds.

Adults aren’t safe either since around one in three Americans have experienced identity theft at some point in their lives. For this reason, FreeKick provides comprehensive ID theft security features for minors and adults that help protect the identity of your whole family. Here’s what the service includes:

Services for Adult Children and ParentsServices for Minor Children
Credit profile monitoring
SSN monitoring
Dark web monitoring for personal information
Up to $1 million identity theft insurance
Full-service white-glove concierge credit restoration
Lost wallet protection
Court records monitoring
Change of address monitoring
Non-credit (Payday) loan monitoring
Free FICO® Score monthly
FICO® Score factors
Experian credit report monthly
Credit profile monitoring
SSN monitoring
Dark web monitoring for children’s personal information
Up to $1 million identity theft insurance
Full-service white-glove concierge credit restoration
Sex offender monitoring—based on sponsor parent’s address

FreeKick Pricing

FreeKick offers affordable plans for every family’s needs and budget. There are two pricing options, and the deposits on both plans are FDIC-insured up to $250,000. Find the details in the table below:

FDIC-Insured Deposit AmountPlan Fee
$3,000$0 (Free)
No deposit$149/year

Help your child establish a strong credit profile early and protect your whole family from identity theft—sign up for FreeKick today.