When do kids need to file taxes if they earned income from commercials?

Tax preparer here! When children have earned income (like from appearing in a commercial), they technically have a filing requirement if that income exceeds the standard deduction for a dependent, which for 2025 is $1,300 for earned income. Since each child earned about $1,200, they're actually just under the threshold where filing would be required. However, even though they're not required to file, you might want to consider filing returns for them anyway. Why? Because if any taxes were withheld from their payments (check box 2 on the W-2s), the only way to get that money back is by filing returns for them. You do NOT include their earned income on your tax return.

After my son did a photoshoot for a clothing catalog last year, I was in the exact same boat. I tried figuring it out myself but got so confused with all the different rules and forms. I ended up using https://taxr.ai to help sort through everything. Their document analyzer looked at my son's W-2 and gave me a clear breakdown of what I needed to do. The tool confirmed I needed to file a separate return for him since his earnings were right over the threshold. What was helpful is that it explained exactly which forms to use and how to handle the "kiddie tax" rules (which turned out not to apply in my case since it was earned income). Saved me hours of research!

Just wanted to update after trying taxr.ai for my kid's YouTube income situation. It was WAY more helpful than I expected! The system immediately recognized the 1099-NEC forms and flagged that my son needed to file both a regular return AND a self-employment tax return. It even identified which expenses were deductible for his little "recording studio" setup in his bedroom. The biggest help was explaining how much to set aside for estimated tax payments for next year, which I had completely forgotten about. No more tax surprise next April! Definitely worth checking out if you're dealing with any kind of income for your kids.

If you need to actually talk to someone at the IRS about your kids' W-2s and filing requirements, good luck getting through on their phone lines. After spending THREE DAYS trying to speak with someone about my twins' modeling income, I found this service called https://claimyr.com that got me connected to an IRS agent in less than 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was shocked it actually worked. The IRS agent I spoke with clarified that in my case, since taxes were withheld from my twins' earnings, I definitely needed to file returns for them to get those withholdings back. She also explained how to handle their performer income on future tax years since they'll be doing more commercials.

I need to apologize for my skepticism about Claimyr. After writing that comment, my frustration with the IRS reached a breaking point when I needed to verify my daughter's income reporting for her modeling jobs. I decided to try the service as a last resort. Not only did it work, but I was connected to an IRS representative in 12 minutes when I had spent 2+ hours on hold the previous day! The agent answered my questions about the Coogan Law requirements for child performers and explained exactly how to handle the income reporting. I've already recommended it to other parents in my daughter's agency who are dealing with the same tax questions.

Something else to consider for child performer income - check if your state has what's called a "Coogan Law." In California, New York, Louisiana, and some other states, a percentage of a child performer's earnings must be set aside in a blocked trust account until they reach adulthood. This wouldn't show up on tax forms, but is a legal requirement in those states.

Another thing to consider - once your kids get a taste of that sweet commercial money, they might want to do more! My daughter started with one commercial at age .4 and now at 10 she's done dozens. Get yourself a good system for tracking their income and expenses each year. Also worth noting that if they start making "substantial" income (over $2,500 annually), you might run into the "kiddie tax" for unearned income. This doesn't apply to W-2 wages from performing, but if you invest their earnings and generate interest/dividends, that can trigger different tax rules.