If someone else can claim you as a dependent, your standard deduction for 2026 is the greater of $1,350 or your earned income plus $450, and it cannot exceed $16,100, which is the basic standard deduction for a single filer.1Internal Revenue Service. Rev. Proc. 2025-32 A dependent with little or no wage income lands at the $1,350 floor. A dependent with a real paycheck can shelter far more. The cap exists because the person claiming you already gets a tax benefit from the relationship, and the rules limit how much of a second benefit your own return can generate.
How the Formula Works
Run the comparison in two steps. First, take the larger of these amounts:
- $1,350, the fixed floor, or
- Your earned income plus $450
Then cap the result at the basic standard deduction for your filing status. For a single filer in 2026, that ceiling is $16,100.1Internal Revenue Service. Rev. Proc. 2025-32 The cap only becomes relevant when wages approach $15,650, because $15,650 plus $450 hits the ceiling.
Earned income means wages, salaries, tips, and other pay for work you performed. Unearned income covers interest, dividends, and capital gains. Only earned income lifts the deduction above the $1,350 floor. Unearned income does not enter the formula at all.
Worked Examples by Income Type
Earned Income Only
A college student earns $6,000 at a part-time job with no investment income. The formula compares $1,350 against $6,000 plus $450, or $6,450. The deduction is $6,450, which wipes out the entire $6,000 and leaves nothing taxable.2Internal Revenue Service. Topic No. 551, Standard Deduction Most working teenagers land here: as long as wages stay under $15,650, the deduction covers the income.
Unearned Income Only
A child with $4,000 in dividends and no wages runs the formula and compares $1,350 against $0 plus $450. The deduction is $1,350, the minimum.1Internal Revenue Service. Rev. Proc. 2025-32 That leaves $2,650 in taxable income, and some of it may be pulled into the Kiddie Tax.
Mixed Income
A dependent with $1,200 in wages and $2,000 in interest compares $1,350 against $1,200 plus $450 ($1,650). The deduction is $1,650, subtracted from $3,200 in total gross income, leaving $1,550 taxable.2Internal Revenue Service. Topic No. 551, Standard Deduction The deduction offsets earned income first, then any leftover reduces unearned income, so in this example the $1,550 that remains is entirely investment income.
Taxable Scholarships Count as Earned Income
For purposes of the dependent’s standard deduction, taxable scholarship and fellowship amounts are treated as earned income. Money used for tuition, fees, books, and required supplies is generally tax-free. Money used for room, board, or personal expenses is taxable, and that taxable portion counts on the earned income side of the formula.
The classification helps. A student with $5,000 of scholarship allocated to room and board can plug that $5,000 into the formula, producing a deduction of $5,450 rather than the $1,350 floor. If the same money were treated as unearned income, the deduction would be much smaller.
“Can Be Claimed” Is Enough
The restricted deduction applies if another taxpayer can claim you as a dependent, whether or not they actually do. The IRS language is deliberate: “If you can be claimed as a dependent by another taxpayer, your standard deduction … is limited.”2Internal Revenue Service. Topic No. 551, Standard Deduction A parent who leaves a child off their return, or who deliberately chooses not to claim, does not free the child from the limitation. If the qualifying child or qualifying relative tests are met, the restricted deduction applies.
The qualifying child tests do most of the work here. A child generally qualifies if they are under 19 at year-end (or under 24 if a full-time student), lived with the parent for more than half the year, and did not provide more than half of their own support.3Internal Revenue Service. Dependents
Does the Dependent Have to File?
Not every dependent with income has to file. For 2026, a dependent under 65 and not blind has a filing obligation if unearned income exceeds $1,350, if earned income exceeds $16,100, or if gross income exceeds the larger of $1,350 or earned income (up to $15,650) plus $450.1Internal Revenue Service. Rev. Proc. 2025-32
Even below those thresholds, filing can be worth it. If federal income tax was withheld from a paycheck, filing a return is the only way to get that withholding refunded.
Kiddie Tax on Unearned Income
The Kiddie Tax sits on top of the standard deduction rules. For 2026, a dependent child’s unearned income above $2,700 is taxed at the parent’s marginal rate instead of the child’s own rate.4Internal Revenue Service. Instructions for Form 8615 The first $1,350 of unearned income is covered by the $1,350 standard deduction floor, the next $1,350 is taxed at the child’s rate, and anything above $2,700 moves to the parent’s bracket.
The Kiddie Tax reaches a child who, at year-end, is under 18, is 18 with earned income that did not cover more than half of their support, or is a full-time student aged 19 through 23 with earned income that did not cover more than half of their support. The child files Form 8615 with their Form 1040 and needs the parent’s taxable income to complete it, so the two returns need to be coordinated.4Internal Revenue Service. Instructions for Form 8615
Parent Reporting a Child’s Income on Form 8814
If a child’s only income is interest, dividends, and capital gain distributions totaling less than $13,500, the parent can elect to include it on the parent’s own return using Form 8814, sparing the child a separate filing.5Internal Revenue Service. Instructions for Form 8814
The election has costs. The child loses access to deductions they could have taken on their own return, and income between $1,350 and $2,700 gets taxed at a flat 10% on the parent’s return, which may be higher than what the child would have owed alone.5Internal Revenue Service. Instructions for Form 8814 The election is unavailable if the child had any earned income, if estimated payments were made on the child’s behalf, or if federal income tax was withheld from the child’s income.
Extra Deduction for Age or Blindness
A dependent who is 65 or older or legally blind at year-end adds an extra amount on top of the figure produced by the formula. For 2026, that additional amount is $2,050 for an unmarried dependent and $1,650 for a married dependent, and a dependent who is both 65 or older and blind adds the applicable amount twice.1Internal Revenue Service. Rev. Proc. 2025-32
Itemizing Is Still an Option
A dependent is not locked into the standard deduction. Itemizing on Schedule A is available if qualifying expenses exceed the amount the formula produces. In practice, most dependents do not have enough mortgage interest, state taxes, or charitable contributions to clear even the $1,350 floor, but the option exists for a dependent with significant unreimbursed medical costs or large charitable gifts.