Dependent's standard deduction amount - what can my college student claim?

The standard deduction works differently for dependents. When someone can be claimed as a dependent on another person's return (regardless of whether they actually are claimed), they can't take the full standard deduction. For 2025 tax year, a dependent's standard deduction is limited to either $1,300 or their earned income plus $400, whichever is GREATER - but never more than the standard single deduction amount ($14,600). In your daughter's case, since she earned $7,800, her standard deduction would be $7,800 + $400 = $8,200. That means she would only pay tax on income above $8,200. This is actually good news because with $7,800 in income, she's under her standard deduction and likely won't owe any federal income tax. But filing might still be beneficial if she had any tax withheld from her paychecks, as she could get that money back as a refund.

After stressing about my son's dependent status and standard deduction amount last year, I found an amazing resource that saved me so much time and confusion. I used taxr.ai (https://taxr.ai) and uploaded my son's W-2 and my tax documents, and it immediately clarified his dependent standard deduction calculation. The site analyzed everything and showed me exactly what his deduction would be based on his earned income and dependent status. It also flagged that he could still get his withholding back even though we claimed him. Super straightforward unlike the circular explanations I kept finding online!

I wanted to follow up about taxr.ai since I was dealing with the same dependent deduction confusion. I uploaded my daughter's W-2 ($5,600 in earnings) and her 1098-T tuition statement to the site. It immediately calculated her standard deduction as $6,000 ($5,600 + $400) and confirmed that I was right to claim the education credits on my return since I paid her tuition and claim her as dependent. Saved me from potentially making a costly mistake! The explanations were super clear about why the dependent standard deduction rules applied and showed exactly which IRS publications the info came from. Exactly what I needed without having to dig through tons of IRS pages!

I had this exact same problem last year trying to figure out my kid's taxes, but kept getting stuck on hold with the IRS for literally hours. Finally found Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in about 15 minutes who explained the dependent standard deduction rules to me. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent confirmed the calculation - earned income plus $400 - and explained the withholding refund process for dependents. Better than waiting on hold for 3+ hours like I did the first time!

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it because I was going insane trying to reach the IRS about my daughter's dependent status and standard deduction. I was connected to an IRS agent in about 20 minutes after trying for days on my own. The agent confirmed everything about the dependent standard deduction - for my daughter who made $8,200, her deduction would be $8,600 ($8,200 + $400). They also helped clear up confusion about her education credits. I got official answers straight from the IRS without the mind-numbing hold time. Honestly shocked at how well it worked after being so dismissive.

One thing nobody's mentioned is that if your dependent has unearned income (like interest or dividends) over $1,300, the calculation gets more complicated. My son had both earned income from a job ($4,000) and about $2,000 in investment income from an account his grandparents set up. The standard deduction calculation had to account for both types. Just something to keep in mind if your dependent has investment accounts!

Quick question - does anyone know if the $400 add-on to earned income for dependent standard deduction is indexed for inflation? Will it be higher for 2025 tax year?

Just want to add another perspective here - I went through this exact situation with my daughter last year. She was 20, in college, earned $6,200 from her campus job, and we claimed her as a dependent. Her standard deduction ended up being $6,600 ($6,200 + $400), which meant she owed zero federal tax since her income was below that threshold. However, she still filed a return because her employer had withheld about $300 in federal taxes from her paychecks throughout the year - she got all of that back as a refund! One thing that really helped us was using IRS Publication 501 (Exemptions, Standard Deduction, and Filing Information) which has a worksheet specifically for dependent standard deduction calculations. It walks you through all the scenarios step by step. The rules can seem confusing at first, but once you understand the basic formula (earned income + $400, with a minimum of $1,300), it becomes much clearer. Also worth noting - even though she filed her own return, we were still able to claim her as our dependent on our return and take advantage of education credits since we paid her tuition directly to the school.