How much a minor pays in taxes depends less on their age than on where the money came from. A working teenager’s wages are taxed at their own individual rates, and the standard deduction usually erases the bill entirely. Self-employment income triggers a 15.3% Social Security and Medicare tax once net earnings hit $400. And investment income above $2,700 gets taxed at the parent’s marginal rate under the kiddie tax, which can push a child’s effective rate well above what their own bracket would produce.
Wages and Other Earned Income
Earned income from a job is taxed at the minor’s own rates, not the parents’. What matters is how much survives the standard deduction.
A dependent doesn’t get the full standard deduction that other single filers receive. For 2026, a dependent’s standard deduction equals the greater of $1,350 or the child’s earned income plus $450, capped at the regular single-filer amount of $16,100.1Internal Revenue Service. Revenue Procedure 2025-322Office of the Law Revision Counsel. 26 US Code 63 – Taxable Income Defined
In practice, that formula wipes out most teenagers’ federal tax. A minor earning $8,000 over the summer gets a standard deduction of $8,450, which more than covers the wages. Taxable income: zero. Federal income tax owed: zero. If an employer withheld anything from those paychecks, the only way to get it back is to file a return.
The math changes once earnings climb. A minor earning $20,000 hits the $16,100 cap on the standard deduction, leaving $3,900 in taxable income. All of it falls in the 10% bracket, so the federal bill comes to $390. For 2026, that 10% bracket runs to $12,400 in taxable income for single filers, with 12% applying above that up to $50,400.3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Very few minors reach the 12% bracket on wages alone.
Self-Employment Income
A minor who freelances, runs a small business, or picks up gig work faces a separate tax that W-2 employees don’t. Once net self-employment earnings reach $400, the minor owes self-employment tax on top of any regular income tax.4Internal Revenue Service. Self-Employed Individuals Tax Center
The rate is 15.3%: 12.4% for Social Security plus 2.9% for Medicare.5Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) That’s the full amount a W-2 worker normally splits with an employer. A self-employed minor pays both halves. Social Security applies to the first $184,500 of net earnings in 2026; Medicare has no cap.6Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet
A teenager earning $2,000 mowing lawns as a sole proprietor would owe roughly $283 in self-employment tax (15.3% of $1,847, after the 92.35% adjustment the IRS requires). Half of that is deductible from adjusted gross income. Income tax on the $2,000 is likely still zero because of the standard deduction, but the self-employment tax applies either way.
Investment Income and the Kiddie Tax
Unearned income is where a minor’s tax bill can get expensive. Interest, dividends, capital gains, rents, royalties, and certain trust distributions all fall under the kiddie tax rules, which Congress created to stop parents from parking investment assets in their children’s names to exploit lower brackets.
For 2026, unearned income is layered into three tiers:1Internal Revenue Service. Revenue Procedure 2025-32
- The first $1,350 is sheltered by the dependent’s standard deduction and is effectively tax-free.
- The next $1,350 is taxed at the child’s own rate, typically 10%.
- Anything above $2,700 is taxed at the parent’s marginal rate.
That third tier is the kiddie tax. The IRS treats the child’s net unearned income above $2,700 as if it were stacked on top of the parent’s taxable income to determine the rate.7Office of the Law Revision Counsel. 26 USC 1 – Tax Imposed If the parent sits in the 32% bracket, the child’s investment income above $2,700 is taxed at 32%. Gifting appreciated stock to a child to harvest gains at their bracket simply doesn’t work above the threshold.
Which Minors the Kiddie Tax Reaches
The rule catches more children than most families expect. It applies to any child who is:8Internal Revenue Service. Instructions for Form 8615
- Under 18 at year-end.
- 18 at year-end, unless their earned income exceeded half their own support.
- A full-time student age 19 through 23, unless their earned income exceeded half their own support.
Support includes housing, food, clothing, education, and medical costs. A college student with a trust generating $15,000 in dividends and only $4,000 in wages hasn’t covered half their own support, so the kiddie tax applies to the dividends above $2,700. Wages the same student earns are still taxed at the student’s own rate.
When a Minor Has to File
A dependent minor must file a 2026 return if any of these apply:
- Unearned income exceeds $1,350.
- Earned income exceeds $16,100.
- Gross income exceeds the greater of $1,350 or the child’s earned income plus $450.
- Net self-employment earnings reach $400.
The $1,350 and $450 figures are the 2026 inflation adjustments; the $16,100 is the standard deduction for single filers.1Internal Revenue Service. Revenue Procedure 2025-323Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
Filing can be worth it even when no threshold is crossed. If federal income tax was withheld from a teenager’s paychecks, the only way to recover it is to file. The IRS gives three years from the original filing deadline (or two years from the date the tax was paid, whichever is later) to claim a refund before it’s forfeited.9Taxpayer Advocate Service. Refund Statute Expiration Date (RSED)
Whose Return the Income Goes On
A minor’s income can be reported two ways.
The default is a Form 1040 in the child’s name, with the child listed as a dependent. A parent or guardian signs for a young child. If the kiddie tax applies because unearned income tops $2,700, the child attaches Form 8615, which pulls in the parent’s taxable income to calculate the tax.8Internal Revenue Service. Instructions for Form 8615 A separate return is mandatory whenever the child has earned income, capital gains, or trust distributions, and whenever gross income reaches $13,500.
Parents can instead elect to include a child’s investment income on their own return using Form 8814.10Internal Revenue Service. About Form 8814 – Parents Election To Report Childs Interest and Dividends This election is only available when all of the following are true:
- The child’s only income was interest, dividends (including capital gain distributions), and Alaska Permanent Fund dividends.
- Gross income was more than $1,350 but less than $13,500.
- No estimated tax was paid in the child’s name, and the child wasn’t subject to backup withholding.
A separate Form 8814 is required for each child whose income is folded in.11Internal Revenue Service. Instructions for Form 8814 – Parents Election To Report Childs Interest and Dividends The convenience has a cost: adding the child’s income to the parent’s return raises the parent’s adjusted gross income, which can shrink or eliminate income-sensitive credits and deductions. For a family near a phaseout, the election can lose more than it saves.