Age is More Than a Number: How Age Criteria Affect Your 2025 Tax Filing

The Early Years: Dependents, Students, and the “Kiddie Tax” (Under Age 24)

For young people, the question of filing a tax return often depends on whether they are a dependent and the type of income they earn (earned vs. unearned).

Filing Requirements for a Dependent

If you can be claimed as a dependent on someone else’s return, you don’t always have to file. However, for the 2024 tax year, you must file a return if your income exceeds certain limits:

• Your unearned income (like investment interest or dividends) was over $1,300.
• Your earned income (from a job) was over $14,600.
• Your gross income was more than the larger of $1,300 or your earned income (up to $14,150) plus $450.

The “Kiddie Tax”: Under Age 18/24

The Kiddie Tax is a crucial age-based rule designed to prevent parents from avoiding taxes by shifting investment income to their children. If a child’s unearned income exceeds $2,600, the excess income may be taxed at the parents’ higher tax rate. This tax generally applies to:

• Children under age 18.
• Children age 18 whose earned income doesn’t provide more than half of their own support.
• Full-time students ages 19 to 23 whose earned income doesn’t provide more than half of their own support.

The Peak Earning Years: Credits and Retirement Savings (Ages 25-50)

During your primary working years, age continues to play a role, especially with family-oriented credits and retirement planning.

Child Tax Credit (CTC): Under Age 17

One of the most valuable credits for families, the Child Tax Credit, is strictly age-dependent. To qualify for the credit, your child must be under the age of 17 at the end of the tax year.

Earned Income Tax Credit (EITC): Ages 25-64

The EITC is a refundable credit for low-to-moderate-income workers. If you don’t have a qualifying child, you must be at least 25 years old but under 65 at the end of the tax year to claim it.

The Pre-Retirement Push: Catch-Up and Early Access (Ages 50-64)

As you approach retirement, the IRS provides powerful, age-gated incentives to boost your savings and access your funds.

The Big 5-0: Retirement “Catch-Up Contributions”

Once you turn age 50, you are eligible to make “catch-up contributions” to your retirement accounts, allowing you to save more than the standard annual limit. For 2024, this means you can contribute an extra:

• $7,500 to your 401(k), 403(b), or TSP plan.
• $1,000 to your Traditional or Roth IRA.

The Magic Age: 59½

Turning age 59½ is a landmark moment in retirement planning. At this age, you can begin taking distributions from your traditional retirement accounts like IRAs and 401(k)s without incurring the 10% early withdrawal penalty. (Note: The “Rule of 55” offers an exception for 401(k)s if you leave your job in the year you turn 55 or later).

The Golden Years: Senior-Specific Tax Benefits (Age 65 and Older)

The tax code offers some of its most significant age-based benefits to seniors, helping to reduce the tax burden on a fixed income.

Age 65: The Higher Standard Deduction

Once you turn age 65, you are entitled to a higher standard deduction. This is a direct, automatic tax break. For 2024, you can add an additional $1,950 (if single) or $1,550 (per qualifying spouse) to your standard deduction, lowering your taxable income.

Age 73: Required Minimum Distributions (RMDs)

Under the SECURE 2.0 Act, you must start taking Required Minimum Distributions (RMDs) from your retirement accounts in the year you turn age 73. These distributions are taxed as ordinary income, and failing to take the correct amount results in a significant tax penalty.

Summary: Key Tax Ages at a Glance