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How do i report child's schedule K1 on my return

I have an s-corp and have 2 children who receive a schedule K1 disbursement.

how do i include these in my return?

i have tried enter these on their own returns but it does not add the Kiddy Tax rates.


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1 Best answer

Accepted Solutions
Hal_Al
Level 15

How do i report child's schedule K1 on my return

If your child's only income is from interest and dividends, Alaska PFD or capital gains distributions shown on a 1099-DIV, there is a provision for entering it on your return, using form 8814. 

But since your child has income on a K-1, you are not eligible. He has to file his own return.

If your dependent child is under age 19 (or under 24 if a full time student), he or she must file a tax return for 2018 if he had any of the following:

1.         Total income (wages, salaries, taxable scholarship etc.) of more than $12,000 ($6350 in 2017).

2.         Unearned income (interest, dividends, capital gains) of more than $1050.

3.         Unearned income over $350 and gross income of more than $1050

4.         Household employee income (e.g. baby sitting, lawn mowing) over $2100 ($12.000 if under age 18)

5.         Other self employment income over $400, including box 7 of a 1099-MISC

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2 Replies
Hal_Al
Level 15

How do i report child's schedule K1 on my return

If your child's only income is from interest and dividends, Alaska PFD or capital gains distributions shown on a 1099-DIV, there is a provision for entering it on your return, using form 8814. 

But since your child has income on a K-1, you are not eligible. He has to file his own return.

If your dependent child is under age 19 (or under 24 if a full time student), he or she must file a tax return for 2018 if he had any of the following:

1.         Total income (wages, salaries, taxable scholarship etc.) of more than $12,000 ($6350 in 2017).

2.         Unearned income (interest, dividends, capital gains) of more than $1050.

3.         Unearned income over $350 and gross income of more than $1050

4.         Household employee income (e.g. baby sitting, lawn mowing) over $2100 ($12.000 if under age 18)

5.         Other self employment income over $400, including box 7 of a 1099-MISC

KrisD
Intuit Alumni

How do i report child's schedule K1 on my return

You don't report the children's K-1, they do, unless it is a loss. 

The program will apply the correct tax, it may come up in the summary for the children's return. 

Because of the Tax Cuts and Jobs Act, the kiddie tax rate has changed. 

"For 2018-2025, the Tax Cuts and Jobs Act (TCJA) revamps the Kiddie Tax rules to tax a portion of an affected child’s or young adult’s unearned income at the rates paid by trusts and estates. Those rates can be as high as 37% or as high as 20% for long-term capital gains and dividends. Before the TCJA, the Kiddie Tax rate equalled the parent’s marginal rate (which for 2017 could be as high as 39.6% or 20% for long-term capital gains and dividends).

The TCJA only changes the Kiddie Tax rate structure. The rest of the Kiddie Tax rules are the same as before. Here’s what you need to know about how the Kiddie Tax can come into play and how much it can cost under the current rules."

https://www.marketwatch.com/story/new-tax-law-makes-dreaded-kiddie-tax-more-expensive-2018-09-24

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