Does my kid have to pay taxes on money they earn?

Probably, and the threshold is far lower than most parents expect.

The number is four hundred dollars. A kid who clears $400 or more in net self-employment income during the year is required to file a federal return and owes self-employment tax. That applies regardless of age, and it has held at $400 for both 2025 and 2026.

Two details do most of the work here.

It is net, not gross. The $400 is what is left after the costs of running the business. A kid who took in $600 and spent $250 on fuel, supplies, and a replacement part is under the line. This is the practical reason to keep receipts, and it is usually the first time a kid understands why expenses matter to anyone but them.

And self-employment tax is not income tax. They are separate, and families conflate them constantly. Self-employment tax covers Social Security and Medicare at 15.3%, and it kicks in at $400. Federal income tax generally does not apply until earnings pass the standard deduction, which is $16,100 for 2026. So a kid can easily owe the first and none of the second.

Informal work counts. Mowing, babysitting, walking dogs, and selling things at a market are all self-employment in the eyes of the IRS, whatever anybody calls them around the kitchen table.

There is an upside worth knowing. A kid who files has documented earned income, and documented earned income is what makes a custodial Roth IRA possible. The paperwork that feels like a nuisance at fourteen is what buys decades of compounding.

State rules are their own question and vary considerably. Check yours.

This is a starting point rather than a ruling. Figures are for the 2026 tax year and were checked in September 2026, they change most years, and none of this is tax advice. Once real money is moving, an hour with an accountant is worth more than an evening of searching.