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itemized deductions, a higher standard deduction, or tax credits on his return. Guy can’t claim exemption from withholding when he fills out Form W-4 because his parents will be able to claim him as a dependent, his gross income will be more than $1,150 (the 2022 minimum standard deduction amount), and his unearned income will be more than $400. Claiming exemption from withholding. Beginning in 2022, an employee may claim exemption from withholding if he or she owed no federal tax in 2021 and expects to owe no federal tax in 2022. To claim exemption from with- holding, the employee must certify that he or she meets both conditions by writing "Exempt" on Form W-4 in the space below Step 4(c) and complete Steps 1 and 5. The employee must not complete any other steps on Form W-4. The Form W-4 must then be returned to the employ- ee's employer. Renewing an exemption from withholding. An ex- emption from withholding is good for only 1 year. An em- ployee must file a new Form W-4 by February 15 to con- tinue the exemption. Part 2. Tax on Unearned Income of Certain Children Terms you may need to know (see Glossary):

Adjusted gross income

Adjustments to income

Alternative minimum tax

Capital gain distribution

Dependent

Earned income

Full-time student

Gross income

Itemized deductions

Net capital gain

Net unearned income

Qualified dividends

Standard deduction

Support

Tax year

Taxable income

Unearned income

Unrecaptured section 1250 gain

28% rate gain

The two rules that follow may affect the tax on the un- earned income of certain children. 1. If the child's interest and dividend income (including capital gain distributions) total less than $11,000, the child's parent may be able to choose to include that income on the parent's return rather than file a return for the child. (See Parents' Election To Report Child's Interest and Dividends, later.) 2. If the child’s interest, dividends, and other unearned income total more than $2,200, the child’s income is taxed at special tax rates. (See Tax for Certain Chil- dren Who Have Unearned Income, later.) For these rules, the term “child” includes a legally adop- ted child and a stepchild. These rules apply whether or not the child is a dependent. These rules don’t apply if neither of the child's parents was living at the end of the year. Parents' Election To Report Child's Interest and Dividends (Form 8814) You may be able to elect to include your child's interest and dividend income (including capital gain distributions) on your tax return. If you do, your child won't have to file a return. You can make this election only if all the following con- ditions are met. • Your child was under age 19 (or under age 24 if a full-time student) at the end of the year. • Your child had income only from interest and divi- dends (including capital gain distributions and Alaska Permanent Fund dividends). • The child's gross income was less than $11,000. • The child is required to file a return unless you make this election. • The child doesn’t file a joint return for the year. • No estimated tax payment was made for the year, and no overpayment from the previous year (or from any amended return) was applied to this year under your child's name and SSN. • No federal income tax was withheld from your child's income under the backup withholding rules. • You are the parent whose return must be used when applying the special tax rules for children. (See Which Parent's Return To Use, later.) These conditions are also shown in Figure 1. Certain January 1 birthdays. A child born on January 1, 2003, is considered to be age 19 at the end of 2021. You can’t make this election for such a child unless the child was a full-time student. Publication 929 (2021) Page 9