You claim both your children as dependents, as they both live with you. Your daughter earning an income will affect your tax return no matter what. Her income is added to the total family income.
To clarify,
- You need to enter both children as dependents.
- You can only claim one child for the Eligible Dependant Amount (EDA) if you were a single parent at some point during the year.
- As any income earned by the child affects the amount you are claiming for the EDA, it is advisable to claim the child with a lower income (or none).
- The only credit or benefit affected by the child's income is the Eligible Dependant Amount itself. This will have an effect on the bottom line of your tax return only, and that is why choosing to claim your younger child is recommended.
For more information, please visit our TurboTax article,
Who Can I Claim as a Dependant on my Tax Return?
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