A child’s income is not included on their parent’s tax return (unless they make a special election, and that election only applies to investment income). If a child is required to file a tax return but is unable to do so then their parent is responsible for the filing.
A tax return must be filed for a dependent child who had more than (roughly) $1,000 of investment income, which consists of interest, dividends, and stock sales. If a child has only earned income (from a job) and no investment income, then a tax return must be filed if they earned over (roughly) $6,000. Even if a child is not required to file a tax return they should still do so if income taxes were withheld from their paycheck.
Parents must obtain a Social Security number for their child in order to claim them as a dependent. The child’s Social Security number must also be provided to banks, brokers, and other payers of interest and dividend income. To obtain a Social Security number, parents can file Form SS-5 with their local Social Security office.
Business owners are able to deduct wages paid to their children. These wages are not subject to FICA taxes (Social Security and Medicare) if the child is under the age of 18. Parents should keep detailed records to prove that the work done by their child was business-related.