From Played to Paid - Week 5

Do College Students Have to Pay Taxes in 2025?

Guest Contributor: Raeann Hofkin, CPP

Welcome to Week 5 of our From Played to Paid series—and this time, we’ve got a guest expert in the house!

Whether you’re a college student or the parent of one, you’ve probably asked:

“Do students really have to pay taxes?”

Spoiler: Yes.

But don’t worry—payroll veteran Raeann Hofkin, CPP is here to break it all down, from tax thresholds to summer job surprises to education-related tax breaks that could save you money.

🎓 Federal Income Taxes for College Students in 2025

Are students required to pay federal taxes?

Yes—if they earn enough.

For the 2025 tax year, a student claimed as a dependent must file their own federal return if their earned income exceeds $14,600.

That includes wages from:

• Part-time jobs

• Internships

• Freelance gigs

• Summer work

👉 Even if you earn less, it may still be smart to file— especially if taxes were withheld.

You might get a refund!

Self-employed students?

If you made more than $400 doing side gigs (hello, gig economy!), you’ll need to file—regardless of your dependency status.

What About FICA Taxes?

FICA stands for Social Security and Medicare, and these taxes are usually withheld from your paycheck automatically. [Pardon the interruption. FICA actually stands for Federal Insurance Contributions Act, but since the average American does not know that is, we go with Social Security and Medicare Tax.]

Students working on campus may be exempt from FICA if they’re enrolled at least part-time.

☀️ Summer Jobs & FICA: The Gotcha

However… Many students aren’t enrolled in classes over the summer.

That means:

• You lose your FICA exemption—even for campus jobs

  
  

• Your paycheck will likely have Social Security and Medicare taxes withheld

  
  

• That summer job income could also push you past the filing threshold

So yes, your summer job does count, and yes, taxes still apply.

💸 Tax Credits That Benefit Students

There is good news:

Tax credits and deductions can lighten the load, even if you (or your parents) owe something.

• American Opportunity Tax Credit (AOTC)

  Worth up to $2,500 per student

  Must be enrolled at least half-time in a degree program

  
  

• Lifetime Learning Credit (LLC)

  Worth up to $2,000 per return

  Available to part-time or full-time students

  
  

• Student Loan Interest Deduction

  Deduct up to $2,500 in interest paid—even after graduating

🏛️ State Income Taxes: It Depends

Do students pay state income taxes? Usually—but it depends on where you live and work.

• Some states (like Texas, Florida, and Washington) have no income tax

• Others (like California and Pennsylvania) do—but have student-friendly rules

Bonus tip: If you work in a different state than where you (or your parents) live, you might have to file two state returns.

Yep—welcome to adulting.

Sometimes it takes two - don't be afraid to ask for help

✅ Quick Summary: What Students Should Know About Taxes in 2025

• Being a student doesn’t make you tax-exempt

  
  

• You must file if:

  • Earned income > $14,600 (as a dependent)

  • Self-employment income > $400

  
  

• Summer jobs do count—and may cost you your FICA exemption

  
  

• Tax credits like AOTC and LLC can help

  
  

• State taxes vary—so read the fine print!

  
  

Getting your first paycheck (or tax bill) as a college student can be a shock. But a little bit of payroll literacy can go a long way in helping you keep what you earn—and plan for what you owe.

Thanks again to Raeann Hofkin, CPP for sharing her insight this week!

If this helped you—or your student—stay tuned. We’ve got more real-world payroll insights coming your way every week through Labor Day.