Students have special tax situations and benefits. Your taxes are due on April 15, 2023. The IRS has a helpful tool that can help you determine if you need to file taxes this year. Learn about how being a student affects your taxes below.

Status as a dependent

If you are a minor, you will likely be claimed as a dependent on your parent or guardian’s income tax. You can be a dependent if you are a child, stepchild, brother or sister to the adult taxpayer. In order to be a dependent, you must be under the age of 19, or if you’re a full-time student, you must be under the age of 24. Learn more about the requirements for filing as a dependent.

Federal income tax for minors (high school age)

For federal income tax purposes, if you are a minor who is being claimed as a dependent, you must file taxes if you made more than $12,950. This number represents the standard deduction that can be claimed for a dependent. There are two relevant exceptions to this general rule:

• If you worked a job where you made tips and you owe Social Security or Medicare taxes on that income, you must file your tax return.
• If you made income through self-employment, like you had your own small business, you may owe Self-Employment Tax on Social Security and Medicaid taxes. You will need to file a tax return if you made more than $400 in self-employment. The form you will need to file will be a Schedule SE 1040 Form. 

If you did not make more than $12,950, you will not owe taxes. However, you may have worked for an employer that withheld taxes from your paycheck. This means you may still choose to file a tax return to get a refund of your withheld earnings.

Illinois state income tax for minors (high school age)

For Illinois state income tax purposes, if you are a minor who is being claimed as a dependent, you must file taxes if you made more than $517 a month. Learn more about this on the Illinois Department of Human Services website.

Federal income tax for college-age students (18+)

If you are a full-time student under the age of 24, you can be claimed as a dependent on you parent’s or guardian’s taxes. However, you can also file as an independent taxpayer. Whether you file as a dependent or independent taxpayer can impact your eligibility for tax credits. If you file as a dependent, only the taxpayer claiming you is eligible for the American Opportunity Tax Credit and the Lifetime Learning Credit. If you file independently, you are a taxpayer who is eligible for those two credits.

The American Opportunity Tax Credit (AOTC) is a credit for qualified education expenses paid for an eligible student for the first four years of higher education. You can get a maximum annual credit of $2,500 per eligible student. Learn more about the requirements to qualify for the AOTC. 

The Lifetime Learning Credit (LLC) is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution. This credit can help pay for undergraduate, graduate and professional degree courses — including courses to acquire or improve job skills. There is no limit on the number of years you can claim the credit. It is worth up to $2,000 per tax return. Learn more about the requirements to qualify for the LLC.

If you are receiving scholarships or grants, they are usually tax free. You can figure out if your scholarship or grant is tax free on the IRS website. The IRS also has a helpful guided interview that can help you figure out if you need to include your scholarship, fellowship or education grant on your income tax return.

You may receive a 1098-T form your school. Your college or career school will provide your 1098-T form electronically or by postal mail if you paid any qualified tuition and related education expenses during the previous calendar year. You will need to report this form on your taxes.

You may also receive a 1098-E form, which reports the amount of interest you paid on student loans in a calendar year. If you have outstanding loans with more than one servicer, you'll receive a 1098-E from each servicer to which you paid at least $600 in student loan interest. You may be eligible to deduct the interest you paid on your student loans on your taxes. Learn more on the Federal Student Aid website.

Do I have to report income earned from a work-study job on my taxes?

If you participate in a work-study program, you will be working in a part-time job, usually for your college. Your income from the job is taxable and you’ll need to complete a W-4 so the college withholds the right amount of federal income tax. Your employer will give you a W-2 that will list all the required information to fill out your 1040 form.

If you use earnings from your work-study program to pay for school-related expenses (tuition and fees), those payments may be qualifying expenses for an education credit (AOTC or LLC credit mentioned above).

Earnings from a work-study position are subject to state and federal payroll taxes. FICA taxes (Medicare and Social Security) will also be taken out of your earnings unless you:

• Are currently enrolled in college full time, and
• Currently work less than 20 hours per week

Learn more about getting free or low-cost tax help.