Does my 12-year-old need to file taxes after receiving a 1099-NEC with income?

7 Your instincts are correct. When a child receives a 1099-NEC, they're being treated as self-employed, which changes the filing requirements significantly. The $14,600 threshold applies to W-2 income (employee wages), not self-employment income. For self-employment income, the filing threshold is much lower - just $400 net earnings. Since your daughter received $6,300 on a 1099-NEC, she would need to file a tax return and would be subject to self-employment tax (Medicare and Social Security taxes), which is roughly 15.3% of her net earnings. This situation is actually quite concerning because the IRS might question why a 12-year-old is being treated as an independent contractor rather than an employee or family helper. There are specific rules about employing family members in a business, especially minors.

9 After dealing with a similar situation with my teenager who models occasionally, I found a super helpful tool at https://taxr.ai that analyzes 1099s and other tax documents to tell you exactly what you need to do. You upload the 1099-NEC and answer a few questions about your child's situation, and it gives you a clear explanation of filing requirements and potential issues. In my case, it flagged that my son's 1099 should have actually been a W-2 since the company was directing when and how he worked. It saved us from potential headaches and helped us approach the company about the misclassification.

18 Just wanted to follow up - I tried taxr.ai for my niece's YouTube 1099 situation, and it was surprisingly straightforward! The analysis confirmed she needed to file as self-employed but also identified several deductions we hadn't considered (portion of internet, computer equipment, editing software). It highlighted that she doesn't need to pay self-employment tax on the first $400, which we didn't know. The documentation breakdown made it easy to understand exactly which forms we needed. Definitely worth checking out if you're dealing with the 1099 for your 12-year-old.

15 After reading about your situation, I wanted to share something that might help with the communication aspect. I had a similar disagreement with my ex about our son's summer job income, and we hit a wall trying to resolve it until I used Claimyr (https://claimyr.com) to actually speak with an IRS representative. The wait times to talk to the IRS were ridiculous (4+ hours when I tried), but Claimyr got me connected in about 15 minutes. The IRS agent confirmed the self-employment filing requirements and explained the potential penalties for non-filing. Having that official word helped end the argument with my ex. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c

22 I need to admit I was wrong. After dismissing the Claimyr suggestion, I spent 3.5 hours on hold with the IRS this morning and got disconnected twice. Out of frustration, I tried the service and was connected to an actual IRS representative in about 20 minutes. The agent confirmed everything others here have said - a 12-year-old with a 1099-NEC over $400 absolutely needs to file, and there could be issues with classifying a child that young as an independent contractor. They even mentioned that the parent issuing the 1099 could face scrutiny for potentially improper classification. This is definitely something worth addressing properly before filing season.

4 Tax professional here - there's another angle to consider: the "Kiddie Tax" rules might apply. If your child has unearned income over a certain threshold, it could be taxed at the parent's rate rather than the child's rate. However, income from actual work (even as a contractor) is generally considered earned income. The bigger issue is that the IRS might question whether a 12-year-old can legitimately be considered an independent contractor. There are very specific tests for contractor status, and one key element is independence and control over how the work is performed. It's hard to argue a 12-year-old working in a parent's business meets these criteria.

19 I went through this exact situation with my daughter (14) who does social media content for local businesses. Her mom issued her a 1099-NEC for $5,800. We ended up filing: - Schedule C (reported the $5,800 as business income) - Schedule SE (for self-employment tax) - Form 1040 She had to pay about $820 in self-employment tax even though she didn't owe income tax. It was actually a good learning experience about taxes, but I agree with others that the classification was probably incorrect.

5 Has anyone addressed whether this could be an intentional income-shifting strategy by the mom? I've seen small business owners do this to reduce their own tax liability by "paying" family members. The IRS is aware of this practice and does scrutinize family business arrangements. If the child isn't actually performing meaningful work worth $6,300, or if they're not being paid market rates for the work, this could be problematic in an audit.

You're absolutely right to be concerned about this situation. As several others have mentioned, the $400 threshold for self-employment income is key here - your daughter definitely needs to file. However, I'd strongly recommend getting professional help before proceeding. The classification of a 12-year-old as an independent contractor is highly questionable and could trigger an audit. The IRS looks closely at family business arrangements, especially when children are involved. A few red flags I see: 1) A 12-year-old typically can't meet the "independence" test for contractor status, 2) The amount seems high for basic filing/sorting work by a child, and 3) This could be viewed as income shifting to avoid taxes. I'd suggest consulting with a tax professional who can review whether this should have been handled differently (like employee wages with FICA exemptions for children in family businesses) and help you navigate the filing requirements properly. The goal should be compliance, not just getting through this year's filing.