Douglas Olsen
Whether or not a working college student needs to pay taxes depends on several factors, including their income, age, student status, and dependency status. If a student's income is below the filing requirement for their age, status, and dependency, they are not required to pay federal taxes or file an income tax return. However, even if not required, students may choose to file a tax return if they are entitled to a refund of withheld income tax or if they are eligible for a refundable credit. Working college students should consider the potential benefits of filing a tax return, such as receiving a tax refund or taking advantage of special tax benefits and deductions.
| Characteristics | Values |
|---|---|
| Do college students have to file a tax return? | College students who don't earn enough money may not be required to file a tax return, but they could be missing out on a refund if they don't. |
| What if my employer withheld money from my paycheck for income taxes? | You might be entitled to a tax refund. The only way to get your refund is to file an income tax return. |
| What if I'm an international student? | If the IRS does not consider you a resident for tax purposes, you will need to use Form 1040-NR or 1040-NR-EZ. If you don't have a Social Security Number (SSN), you'll need an Individual Taxpayer Identification Number (ITIN). |
| What if I'm an undocumented student? | You'll need to apply for an ITIN to file your taxes. |
| What if I'm a dependent? | If you're a full-time student, your parents can claim you as a dependent until the age of 24. |
| What forms do I need to file taxes? | W-2 forms from employers, a 1098-T form from your college for tuition payments, and any documentation for scholarships or grants. |
| Can I deduct my student loan payments from my taxes? | You can deduct the interest you pay on student loans—up to $2,500—if you make less than $80,000 a year. |
| Can I deduct my scholarship money from my taxes? | Scholarship money that is used to cover tuition costs and other direct education expenses isn't considered taxable income. However, if your scholarship is used for room and board or other unqualified expenses, it would need to be reported as taxable income. |
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International students
J-1 and F-1 students are considered nonresident tax filers for their first five calendar years in the US. After five years, they are typically considered resident tax filers. Most J-1 scholars are considered nonresidents for tax purposes for their first two calendar years in the US.
It is important to note that the US tax system is complex, and international students should consult official IRS resources or seek professional tax advice to ensure they comply with their tax obligations.
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Tax refunds
Even if you aren't required to file a tax return, you might still be entitled to a tax refund. For example, if you worked a job where federal taxes were withheld from your paycheck, you may get some of what you paid throughout the year refunded. You can also deduct the interest you pay on student loans—up to $2,500—if you make less than $80,000 a year.
International students with zero US income must complete Form 8843 and send it to the IRS to report that they earned no income in the country.
If you are required to file a federal income tax return, you will indicate whether someone else can claim you as a dependent. You can deduct the interest on student loans, up to $2,500, if you make less than $80,000 a year. You can also deduct the interest you pay on student loans—up to $2,500—if you make less than $80,000 a year.
There are two types of tax credits available for college students or those who claim students as dependents: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). The AOTC is worth up to $2,500 per year for an eligible college student and is refundable up to $1,000. The LLC is worth up to $2,000 per year and is not refundable, but it can reduce the amount of federal income tax owed.
If you are a college student, it is important to double-check your taxable income. Some or all of a scholarship or grant may be taxable if used for incidentals, including room and board or travel. However, scholarship money that is used to cover tuition costs and other direct education expenses is typically not considered taxable income.
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Tax credits
Whether or not college students need to pay taxes depends on their income and specific IRS requirements. If you don't meet the income requirements, but your employer withholds money from your paycheck for income taxes, you might be entitled to a tax refund. In this case, the only way to get your refund is to file an income tax return.
There are two types of tax credits available for college students or people who claim students as dependents: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).
American Opportunity Tax Credit (AOTC)
The AOTC is a credit for qualified education expenses paid for an eligible student during the first four years of higher education. It is worth a maximum of $2,500 per eligible student per year and is available for the first four years at a post-secondary or vocational school. The credit is partially refundable, and taxpayers could get up to $1,000 back. To be eligible to claim the AOTC, taxpayers must complete Form 8863, Education Credits, and file it with their tax return.
Lifetime Learning Credit (LLC)
If you don't qualify for the AOTC, you may still be eligible for the LLC. The LLC is worth up to $2,000 per year and can be used for all years of postsecondary education and for courses to acquire or improve job skills. Unlike the AOTC, the LLC is not refundable, but it can still reduce the amount of federal income tax that you owe.
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Dependents
Whether or not a college student needs to pay taxes depends on their income and specific IRS requirements. Students who are single and earned more than the $14,600 standard deduction in the 2024 tax year must file an income tax return. That $14,600 includes earned income (from a job) and unearned income (like investments). They must also file a return if they are a dependent and their unearned income is greater than $1,300 or their self-employment income is more than $450.
If a college student doesn't earn enough money, they may not be required to file a tax return, but they could be missing out on a refund if they don't. For instance, if federal taxes were withheld from their paycheck, they may be entitled to a tax refund. The only way to get this refund is to file an income tax return. Additionally, if a college student is a dependent, they may be eligible for education tax credits such as the American Opportunity Tax Credit or the Lifetime Learning Credit, which can significantly reduce their tax bill.
If a college student is claimed as a dependent, their parents may be eligible to take the American Opportunity Tax Credit during their first four years of postsecondary education. This credit can be worth up to $2,500 for the 2024 tax year and can help cover eligible college costs like tuition, books, and supplies. To qualify, the student must be enrolled at least half the time and pursuing a degree or other recognized educational credential, among other requirements.
According to the IRS, a dependent is someone whose income and care were primarily provided by a taxpayer during the year. A parent can generally claim their college student children as dependents on their income tax return until they are 24 if they meet certain tests. These tests include the student not providing more than half of their own financial support and the parent providing more than half of their support. Additionally, the student must have lived with the parent for more than half of the tax year, although there are exceptions for temporary absences such as when the student is away at school.
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Income requirements
Whether or not a working college student needs to pay taxes depends on their income and whether their employer withholds taxes from their paychecks. Students who are single and earned more than the standard deduction of $14,600 in the 2024 tax year must file an income tax return. This $14,600 includes both earned income (from a job) and unearned income (like investments).
If a student is a dependent and their unearned income (including interest and dividends, unemployment compensation, and income as a beneficiary of a retirement plan) is greater than $1,300, or their self-employment income is more than $450, they must file a return. If a student earned less than $14,600, they should still consider filing to receive refunds from federal and state withholding taxes.
International students required to file taxes will need to use Form 1040-NR or 1040-NR-EZ, unless the IRS considers them a resident for tax purposes. They can file these forms using either their Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN) if they don't have an SSN.
Students with student loans or education costs may be eligible to claim education deductions and credits on their tax returns, such as loan interest deductions, qualified tuition programs, and education savings accounts. The American Opportunity Tax Credit (AOTC) is worth up to $2,500 per year and is refundable up to $1,000. The Lifetime Learning Credit is worth up to $2,000 per year and can reduce federal income tax. The Student Loan Interest Deduction allows for a deduction of up to $2,500 in interest paid on school loans.
Students who work as independent contractors or freelancers are responsible for reporting their own taxes and sending in quarterly estimated tax payments or an annual tax payment. They should receive 1099s reporting income from freelance work or dividends, interest, or capital gains from investment brokerage firms or banks.
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Frequently asked questions
It depends on their income and whether they had employers withhold taxes from their paychecks. Students who are single and earned more than the standard deduction in tax year 2024 must file an income tax return.
In 2022, the standard deduction for students was $12,950. In 2024, it was $14,600.
You can file your taxes for free if you have a straightforward return. You can use software like TaxSlayer or TurboTax to calculate your tax return and fill out the appropriate tax forms.
