Being claimed as a dependent doesn't mean that you can't file your own tax return. In fact, tax law requires that you do so if you earn above certain limits. Taxpayers who claim dependents can't report their dependents' income on their own returns unless it's unearned, such as interest or capital gains. And certain rules apply even in this case.
Whenever a taxpayer files a tax return, there's the potential for a refund, regardless of whether they're someone's dependent.
Earned Income Requirements
Dependents must file tax returns when their earned income hits certain thresholds:
- $12,200 for single filers, or the amount of the year's standard deduction
- $13,850 for single filers who are either age 65 or older
- $15,500 for single filers who are age 65 or older and blind
- $400 for filers who have self-employed income
These limits apply to 2019 – the tax return you'll file in 2020. The numbers are adjusted periodically to keep up with inflation. Income requirements exist for unearned income as well.
Married taxpayers must file a return if they earn just $5 or more and their spouse files a separate married return and itemizes. You'd also have to file if you earned tips on which you didn't pay Social Security and Medicare taxes, or if your employer didn't withhold for those taxes. But this might negate any potential tax refund.
Other Reasons to File a Tax Return
Tax refunds can derive from two sources: Your employer withheld too much income tax from your paychecks, more than what you actually owe to the IRS, or you're eligible for a refundable tax credit.
A nonrefundable credit subtracts from what you owe the IRS when you complete your tax return, but that's all it can do. The IRS keeps the balance if you're entitled to a tax credit that's greater than your tax bill. The IRS will send you the difference, however, if you're eligible to claim a refundable credit.
Someone who's claimed as a dependent isn't entitled to claim certain tax credits, but the Premium Tax Credit isn't one of them, and it's refundable. You might be eligible for this one if you bought health insurance through the marketplace. This credit is intended to reimburse you for some or all of what you paid in premiums. The refundable American Opportunity education credit and the earned income tax credit can be available to some dependents as well.
As for any over-withholding from your paychecks, filing a return is the only way to get that money back from the IRS, even if you're not required to do so. This often happens if you earn less than the income thresholds that require you to file.
How to File a Return As a Dependent
Some refundable tax credits can depend on whether your parents or another taxpayer claim you as a dependent on their own tax return – although this is not the case with refunds due to over-withholding.
In either case, you're required to check a box on your own Form 1040 indicating that you can be claimed as a dependent on someone else's return, even if that taxpayer doesn't do so. The IRS will most likely reject your tax return if you fail to mark this box.
You can't e-file your tax return if you're younger than age 16 and this is the first time you're filing. You'll have to do things the good, old-fashioned way and snail-mail your return to the IRS, but only this first time.
You Have More Time to File in 2020
You have until July 15 in 2020 to file a tax return and claim that refund due to the coronavirus pandemic. That gives you a little more time to convince someone who could claim you as a dependent not to do so and allow you to collect a refundable credit if you're eligible. The IRS has extended the filing deadline for the year from the usual April 15. And, yes, the IRS is still issuing refunds, even if you file before that time – usually within about 21 days.
- eFile: Filing Requirements for Dependents
- IRS: Publication 929 (2019), Tax Rules for Children and Dependents
- IRS: Publication 501 (2019), Dependents, Standard Deduction, and Filing Information
- The College Investor: What to Do If My Parents Claimed Me On Their Taxes?
- Credit Karma: When Does a Dependent Have to File a Tax Return?
- IRS: Credits and Deductions for Individuals
- IRS: Tax Day Now July 15 – Treasury, IRS Extend Filing Deadline and Federal Tax Payments Regardless of Amount Owed