Do College Students Need to File Their Own Tax Return?

Family in Hollis, NH Has Questions About Their Future College Student

If a single college student made more than $13,850 throughout the year or had an employer withhold taxes from their paycheck, they should file their own tax return. If their unearned income, including interest, dividends, unemployment compensation, and income as a beneficiary of a retirement plan, exceeds $1,250 for the year a tax return must be filed. If the college student is self-employed with an annual income of $400 or more, a tax return would also need to be submitted at the end of the year reporting this income.

A family in Hollis was planning ahead for their oldest child to venture to college in the fall. Wanting to be prepared for the end of the year, they were inquiring about whether their new college student would need to file a tax return.

Claiming a College Student as a Dependent

In many cases a full-time college student can still be considered a dependent and claimed as such on the parents’ tax return. Full-time college students, who have more than half of their support provided by their parents, can be listed as a dependent on their parents’ tax return. When claiming a college student as a dependent on a tax return, the threshold for 2024 is a maximum gross income of $5,050. This includes earned income, as well as unearned income from interest, dividends, etc. This number varies from year to year, so double-check the current tax law.

Choosing Not to File a Tax Return May Mean You Lose Money in the Long Run

Even when the college student is not required to file a tax return, if their employer withheld taxes from a paycheck, they would likely have a refund on that money. This money will only be accessible if a tax return is filed. Many college students tend to think that they do not need to file a tax return, anxious to avoid this task for a few more years. As long as your income is below $13,850 this is okay, but it can cost you money by not claiming your wages and the taxes that were withheld. You can only receive a tax refund if you file a tax return.

The family in Hollis now have a better understanding of how their college student should handle his taxes going forward and they plan to file a tax return for their new college student in 2024.