Can I still claim my child as a dependent if they have earned income over $30k?

Yes, you can still claim your 4-year-old as a dependent despite her income. The income test only applies to the "qualifying relative" test, not the "qualifying child" test which is what you'd use for your daughter. For a qualifying child, there are five tests: relationship, age, residency, support, and joint return tests. Since she's your daughter, under 19, lives with you, and isn't filing jointly with a spouse, the only remaining question is the support test. The support test requires that the child does not provide more than half of their own support. So as long as the total cost of supporting your daughter (housing, food, clothing, medical, etc.) exceeds what she personally pays for her own support, you're good to claim her. What your daughter will need to do is file her own tax return because of her earned income, but this doesn't prevent you from claiming her as a dependent. Just make sure that on her tax return, she checks the box that says someone can claim her as a dependent.

Hey there! I was in a similar situation with my 6-year-old son who did some modeling work. I spent HOURS researching this and talking to different tax people until I found a solution that worked. I ended up using https://taxr.ai to upload his contracts and income statements, and it automatically figured out that I could still claim him while he filed his own return. The tool breaks down exactly which IRS regulations apply to child performers and gave me step-by-step guidance for both returns. What was really helpful was that it explained the "kiddie tax" rules that apply specifically to children with unearned income (though it sounds like your daughter has mostly earned income from actual work). Anyway, the site has a special section for parents with children in entertainment that was super helpful.

Just wanted to follow up - I ended up trying https://taxr.ai for my son's YouTube income situation and I'm genuinely impressed. It walked me through exactly how to handle his income, showed me which expenses were deductible, and explained how the Coogan Law (which protects child performers' earnings) applied in our state. The best part was that it generated a complete checklist of forms we needed and even pre-filled some of the more complicated sections. It showed me definitively that I could still claim him as a dependent despite his income level, and explained all the rules around the "qualifying child" test that I was confused about. Wish I'd known about this last year!

Something nobody mentioned yet - with that level of income from your 4-year-old, you're probably dealing with incredibly long hold times if you need to call the IRS with questions. I was in this situation last year with my child actor and spent WEEKS trying to get through to someone who could answer my specific questions. Finally found https://claimyr.com which got me connected to an IRS agent in under 20 minutes when I had been trying for days on my own. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed everything about being able to claim my kid as a dependent despite her income and helped me understand how to handle some deductions related to her acting classes and headshots. Totally worth it instead of waiting on hold for hours only to get disconnected.

Ok I have to eat my words and apologize to Profile 16. I was so skeptical about Claimyr that I almost didn't try it, but I was desperate after waiting on hold with the IRS for 2+ hours on three separate days. The service at https://claimyr.com actually got me through to an IRS representative in about 15 minutes yesterday. I explained my situation with my child's modeling income and got clear confirmation that I can still claim her as a dependent plus specific guidance on how to handle her return properly. The agent even emailed me the relevant IRS publications that cover child performer income. For anyone dealing with this specific situation of high-earning child dependents, getting actual IRS confirmation on how to handle it correctly was a huge relief. I was honestly shocked it worked so well after my initial doubts.

Something to be aware of - depending on what state you live in, there might be Coogan Law requirements for your child's earnings. This means you may need to set aside a portion of her earnings (usually 15%) in a blocked trust account that she can access when she turns 18. California, New York, Louisiana, and New Mexico have these laws to protect child performers. If your child worked in one of these states, you should look into this ASAP as it's a legal requirement, not just a tax issue.

Has anyone dealt with filing a tax return for a 4-year-old? Like what tax software even allows this? I'm trying to help my sister with her kid's acting income and we're confused about the logistics.

Just wanted to add my experience as someone who went through this exact situation! My 5-year-old son earned about $35k from a recurring role on a kids' show last year, and I was initially panicked about the tax implications. The good news is that you can absolutely still claim her as a dependent - the income threshold that disqualifies dependents only applies to "qualifying relatives" (like adult children or other family members), not "qualifying children" under 19. Since she's your 4-year-old daughter living with you, she meets the qualifying child test regardless of her income. A few practical tips from our experience: 1. Keep detailed records of ALL her work-related expenses - acting classes, headshots, travel to sets, etc. Many of these can be deducted on her return. 2. The "kiddie tax" rules might apply to any unearned income she has (like interest from her earnings), but her acting income is earned income and taxed normally. 3. Make sure to set aside money for estimated taxes if she'll have similar earnings next year - child actors often don't have enough withheld. Also, definitely look into your state's Coogan Law requirements if applicable. We had to set up a blocked trust account for 15% of his earnings here in California. It's actually a good thing long-term since it ensures she'll have money saved for when she's older!