Dependent status for child with earned income - can I still claim them on my taxes?

So does this mean the child gets taxed on all $28K of income? That seems like a lot for a 4 year old. I thought there were special rules for child performers or something?

Yes, the child will be taxed on all earned income, just like any taxpayer. There's no special exemption just because she's young. The "kiddie tax" you might be thinking of applies to unearned income (investment income) for children, not earned income from actual work like modeling. For earned income, she'll get the standard deduction (at least $1,100 for dependents with earned income) and then pay taxes on the rest according to the regular tax brackets. She'll likely get some of those withholdings back as a refund, but yes, she will owe taxes on her earnings.

Did it help with figuring out those Coogan Law requirements too? My daughter just booked her first commercial and I'm completely lost on all the regulations.

Does it actually look at the specific forms and payments, or is it just general advice? Because my kid's situation is kind of unique with income from different states.

It totally helped with the Coogan Law requirements! You upload the contracts and pay stubs, and it identifies which states have these laws that require setting aside a portion of earnings. It even explains how to set up the blocked trust accounts and what paperwork you need. For multiple state income situations, that's exactly what made it valuable for us. You can upload all the various 1099s or W-2s, and it breaks down your state filing requirements based on where the work was performed. It analyzes the actual forms you upload, not just generic advice, so it's customized to your kid's exact situation.

Wait, how does this actually work? The IRS phone system is notoriously impossible - how can a service magically get you through?

Sounds like a scam to me. Nobody can "skip the line" with the IRS. They probably just connect you to some random person pretending to be an agent who gives bad advice.

It's not magic - they use an automated system that continually calls the IRS until they get through, then they transfer the call to you. It's similar to those restaurant services that wait on hold to get you reservations, just applied to the IRS. There's absolutely no line skipping involved. They're just handling the hold time for you instead of you having to keep your phone tied up for hours. When they get through to an actual IRS agent (the real IRS, not some fake service), they connect you directly. The agents answer your questions just like if you'd called yourself - asking for your info to verify your identity and everything.

What happens if we're in a state without those specific laws? We're in Georgia, and I'm not sure if there are similar requirements here. Should we still set something aside for her?

Georgia doesn't have a specific Coogan Law requirement like California or New York. However, it's still a really good idea to set aside some of your child's earnings in a trust or protected account for their future. Even without legal requirements, many parents choose to save a portion of their child's earnings for college or to give them a financial head start when they reach adulthood. You could set up a 529 college savings plan, a custodial account (UTMA/UGMA), or even a standard savings account in your child's name with you as the custodian. Just be aware that if you're working across state lines or with companies based in Coogan Law states, you might still need to comply with their requirements.

Kiddie tax only applies to unearned income (investments, interest, etc), not to the modeling/acting earnings themselves. If you invest your child's earnings and those investments generate more than $2,300 in income (dividends, interest, capital gains), that's when kiddie tax might kick in. In that case, any unearned income over that threshold would be taxed at the parent's higher tax rate.