Generally, if your child meets the following qualifications he is not required to file a tax return:
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Under 19 years old, or under 24 and a full-time student
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Not providing over 50% of his own financial support
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Total income is less than the “Single” standard deduction
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Unearned income (i.e. interest, dividends, capital gains) is less than the IRS determined dollar amount
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Self-employment income is less than $400 (See Business vs. Hobby FAQ for more details)
To read more and to see some detailed examples, check out this article.
Even if your child is not required to file, if he has federal or state income tax withholding on his W-2, he may choose to file to receive a tax refund.
Unless there are college credits available (which often require coordination with the parents’ tax return), we suggest that students try something like TurboTax to file their own tax returns.
Going forward, if your child will likely meet the above qualifications and therefore will not be required to file a tax return, he can mark “Exempt” on his W-4(s) and no federal or state income tax will be withheld. Taking this approach will avoid the painful process of filing a return just to get a few dollars back at tax time!