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Childs youtube income

Forum|Forum|4 years ago
January 23, 2022
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My 17 year old earned around 4000 last year on youtube. The AdSense account is under my name and social because you have to be 18 so the 1099 will be assigned to me. How do I transfer the income to him so he can claim it on his own return. I've seen many post saying that since its under my SSN it is my income, but in tax pub 929, tax rules for children it says,

"Child's earnings.

For federal income tax purposes, amounts a child earns by performing services are included in the gross income of the child and not the gross income of the parent. This is true even if, under state law, the parent has the right to the earnings and may actually have received them."

So there must be a way. Can anyone help?

Best answer by DMarkM1

The 1099-NEC is reported under your social security number to you and the IRS so the IRS will be looking to reconcile that income on your return. You will therefore need to report it and then subtract it out as "dependent child income under Publication 929."

Since the amount is over $400 your son will need to file a return and claim the income and pay the taxes including self-employment taxes on the income.

First on you return enter the 1099-NEC under the "Wages & Income" tab, the "Other Common Income" topic. Enter the form info and for the description use "Dependent Child AdSense income." On the follow on page check "This is not income earned as an employee self-employed." Finish the topic interview and then go back to the "Wages & Income" tab.

Scroll down "Less Common Income"
"Show More"
"Start/revisit" the "Miscellaneous Income" topic
"Start/revisit" the "Other reportable income" topic
Enter "Child Income Pub 929"
Enter the amount as a "Negative number"

The 1099-NEC will then be entered as self-employment income on your son's tax return in the "Wages & Income" tab.

DMarkM1Answer

The 1099-NEC is reported under your social security number to you and the IRS so the IRS will be looking to reconcile that income on your return. You will therefore need to report it and then subtract it out as "dependent child income under Publication 929."

Since the amount is over $400 your son will need to file a return and claim the income and pay the taxes including self-employment taxes on the income.

First on you return enter the 1099-NEC under the "Wages & Income" tab, the "Other Common Income" topic. Enter the form info and for the description use "Dependent Child AdSense income." On the follow on page check "This is not income earned as an employee self-employed." Finish the topic interview and then go back to the "Wages & Income" tab.

Scroll down "Less Common Income"
"Show More"
"Start/revisit" the "Miscellaneous Income" topic
"Start/revisit" the "Other reportable income" topic
Enter "Child Income Pub 929"
Enter the amount as a "Negative number"

The 1099-NEC will then be entered as self-employment income on your son's tax return in the "Wages & Income" tab.

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C

cqpkyo

Hello DMarkM1! Does this still work for the 2023 tax return? Also, is it ok to use this even if I have a 1099-MISC? I will file a separate tax return for my child ( sched c). I tried doing the 1099-Misc route but after adding the negative amount turbotax won't remove the self-employed tax. Your method 1099-Nec doesn't add a self-employed tax as it have the the check button option "This is not money earned as employee or self-employed individual, it is from sporadic activity or hobby (this is not common) . Thank you in advance!

C

cqpkyo

For Form 1099-MISC, report this as "Other Income" on your tax return.

Start in Federal Taxes >> Wages & Income >> Other Common Income >> Income from Form 1099-MISC. Click "Start" and work through the interview.
After entering the info from the 1099-MISC, continue until you see the question about this being connected to your main job, and say "no."
Check only the box for 2023 income.
Then answer that this was not an "intent to make a profit."

Those three answers should classify this as "Other Income", which will appear on Line 8 on Form 1040.

To offset this income, make another 1099-MISC entry with a negative value in Box 3 (equal to the income amount). The two entries will net to zero on Form 1040 Line 8.

@cqpkyo

Hi @PatriciaV ! Thank you for your reply! I didn't put in box 3 until now. That works. Thank you! Appreciate the assistance.