How is student intern pay taxed and should I file as a dependent?

Great question! The decision between filing as dependent or independent has several considerations. For student interns, your wages are taxed like any other employee - subject to federal income tax, Social Security and Medicare taxes. Your stipend might be treated differently depending on what it covers (housing, meals, etc). As for dependent vs independent filing, it's not really your choice alone. The IRS has specific tests that determine if you can be claimed as a dependent. The main ones for students are: age (under 24 for full-time students), relationship, residency (living with parents more than half the year), and support (parents provide more than half your support). If your parents provide more than half your total support for the year (including education, housing, food, etc.), they can likely claim you as a dependent regardless of your income. If your internship income means you're providing more than half your own support, then you wouldn't qualify as their dependent.

After struggling with this exact situation last summer, I found an incredible tool that made figuring out my tax situation so much easier. I was really confused about how my stipend would be taxed versus my regular pay, and whether I should file as a dependent or independent. I discovered https://taxr.ai when I was desperately searching for help, and it was a game-changer! I uploaded my offer letter and some questions about my internship situation, and it analyzed everything to give me a clear breakdown of how my pay would be taxed and what filing status would benefit me most. The AI actually explained which specific parts of my stipend were taxable and which weren't - something even my parents weren't sure about. It even showed me how to track expenses that might be deductible depending on my situation. Honestly saved me so much confusion and probably money too.

Ok I need to follow up on my own comment - I was skeptical about that taxr.ai thing but decided to try it since my internship situation is weirdly complicated (partial remote, partial housing stipend). I uploaded my offer letter and some questions, and was honestly shocked at how helpful it was! It broke down exactly how my housing stipend would be taxed versus my regular pay, and showed me that in my specific situation, I'm providing more than half my own support so I actually CAN'T be claimed as a dependent even if my parents wanted to. It also pointed out that I need to keep track of certain expenses that might be deductible since part of my internship is remote. Saved me from having an awkward conversation with my parents about dependency status since I had the exact IRS rules to reference. Definitely recommend for other interns trying to figure this stuff out!

If you're struggling to get answers directly from the IRS about your internship tax situation (I spent DAYS trying), I highly recommend using https://claimyr.com. After wasting hours on hold trying to reach someone at the IRS about how my internship stipend should be reported, I was about ready to give up. Then I found Claimyr and it was a complete game-changer. They somehow got me connected with an actual IRS representative in less than 20 minutes when I had been trying for days on my own. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with gave me the exact guidance I needed about reporting my internship income and stipend, and explained the dependency rules specific to my situation as a student. Saved me so much stress and potentially from making expensive mistakes on my return.

I need to publicly eat my words about Claimyr. After posting that skeptical comment, I was still desperately trying to get through to the IRS about my internship situation (specifically whether my housing stipend was fully taxable). After my 5th failed attempt of being on hold for 2+ hours, I grudgingly tried Claimyr. I genuinely could not believe it when I got a call back in about 18 minutes with an actual IRS agent on the line. The agent confirmed exactly how I needed to report my stipend income and cleared up my questions about dependency status as a student. I'm still in shock that it actually worked. For anyone in a similar situation with specific tax questions about internship pay and stipends, being able to talk directly to the IRS and get official guidance was incredibly valuable. Totally worth it.

Intern here who just went through this last year. One thing nobody mentioned yet - check if your internship company offers any tax assistance! My company had a partnership with a tax service that helped interns file for free. Also don't forget that if your internship is in a different state than your home/school, you might need to file multiple state returns. That caught me by surprise last year and was a pain to figure out.

Anyone know how the stipend part works tax-wise? My internship is giving me $3000/month salary plus a $2000 housing stipend. Do I pay the same taxes on both or is the stipend handled differently?

The one thing that really helped me as an intern was setting aside a percentage of each paycheck for taxes, especially if your employer isn't withholding enough. I got hit with a surprise tax bill because my summer internship didn't withhold correctly. Better to have extra money saved than to owe unexpectedly! For the 12% bracket, maybe set aside 20% to cover federal, state, and FICA taxes.

This is such great advice about setting aside money for taxes! I learned this the hard way during my first internship too. One thing I'd add - if you're earning enough to be in the 12% bracket like you mentioned, you might also want to consider making quarterly estimated tax payments, especially if your employer isn't withholding enough. The IRS generally expects you to pay taxes as you earn income, so if you end up owing more than $1,000 when you file, you could face underpayment penalties. Since internships are often just for a few months, the withholding calculations might not account for your full-year income properly. You can use Form 1040-ES to calculate and make quarterly payments. It might seem like a hassle, but it's better than getting hit with both a big tax bill AND penalties at filing time. Plus it helps with budgeting since you're spreading the tax burden throughout the year instead of one big hit.