Form 8616 (2024)

FAQs

Who needs to fill out form 8615? ›

Purpose of Form

For children under age 18 and certain older children described below in Who Must File , unearned income over $2,500 is taxed at the parent's rate if the parent's rate is higher than the child's. If the child's unearned income is more than $2,500, use Form 8615 to figure the child's tax.

What is Form 8814? Form 8814 is a tax form used to report a child's investment income on a parent's tax return. When a child has investment income above a certain threshold, they are required to file their own tax return. This threshold amount changes each year and is set by the Internal Revenue Service (IRS).

Form 8615 must be filed with the child's tax return if all of the following apply: The child had more than $2,500 of unearned income. The child is required to file a tax return.

Forms 8615 or 8814 - Children Investment Income aka Kiddie Tax.

Who is required to file Form 8615 and when? Form 8615 is required to be filed for a child who satisfies all the following criteria: The child's unearned income exceeded $2,500. The child is obligated to file a tax return.

In addition, kiddie tax applies whether or not you are a dependent of your parents. Form 8615, Tax for Certain Children Who Have Unearned Income, is required when a child meets all of the following conditions: The child had more than $2,200 of unearned income. The child is required to file a tax return.

If the dependent child is being claimed under the qualifying relative rules, the child's gross income must be less than $4,700 for the year in 2023. This threshold increases to $5,050 for 2024. When should I stop claiming my child as a dependent?

“What about tax benefits like the Child Tax Credit?” If your dependent has earned income, can you still claim the Child Tax Credit? The answer is “yes,” but your child must first meet all of the eligibility requirements to be claimed as your qualifying child this tax year.

If you have a dependent who's earning income, good news — you can still claim them as a dependent so long as other dependent rules still apply. Your dependent's earned income doesn't go on your return. Filing tax returns for children is easy in that respect.

If you're a parent, your child's taxable income is inherently linked to yours. In some cases, you may be able to include their income on your tax return. In other cases, they'll have to file their own tax return or you will have to file a separate return on their behalf.

Do parents have to report children's interest income? ›

Parents may elect to include their child's income from interest, dividends, and capital gains with their tax return as long as the total taxable interest, dividends, and capital gains are less than $12,500.

For unearned income (for example, income from dividends or interest), the filing threshold is $1,250 for the 2023 tax year. Unearned income that exceeds $2,500 is taxed at the parent's tax rate unless the child's rate is higher (often referred to as the “kiddie tax).

The Kiddie Tax applies to dependent children who are younger than 19 years old, or who are full-time students who are between the ages of 19 and 23. An exception to the Kiddie Tax is a child with earned income totaling more than half the cost of their support.

For children under age 18 and certain older children described below in Who Must File, unearned income over $2,500 is taxed at the parent's rate if the parent's rate is higher than the child's. If the child's unearned income is more than $2,500, use Form 8615 to figure the child's tax.

Who Is Subject to Kiddie Tax? The kiddie tax is imposed on individuals under 18 years old or dependent full-time students under 24 years old whose investment and unearned income is higher than an annually determined threshold.

Form 8615 - Tax for Certain Children Who Have Unearned Income. If the child doesn't qualify for a Form 8814 election, file Form 8615 with a child's separate return. The form will help you calculate the correct tax rate based on the parent's income and tax liability.

The "kiddie tax" applies to unearned income over a certain amount received by children under the age of 19, or children age 19 to 23 who are full-time students and do not provide more than half of their own support.

You can avoid kiddie tax when the age, income, or support test — if applicable — is not met during the tax year. Reducing or eliminating a child's investment income by shifting to tax-free investments can minimize the impact of the kiddie tax or allow a child to avoid the kiddie tax rules.