s corp income not filled in 8615 wks line 2b

[-Reese-]

I have a dependent that has a W2 and s corp business income. Turbotax software is prompting the 8615 even though all of this income is earned. He has no unearned income, certainly not $2300 worth. How do I get Turbotax to recognize this? It is not picking up the business income on the 8615 worksheet line 2b.

[AliciaP1]

You need to be sure your dependent doesn't need to be filing his own tax return.  Even if he still qualifies as your dependent he may still need to file.  Also, if you marked the Schedule K-1 as "not actively participating", the income is passive and therefore unearned.  See Do I need to file my own taxes if I'm a dependent to verify if he needs to file his own return and still qualifies as your dependent.

To check the entry of the K-1 for active participation you can follow these steps in TurboTax Online:

1. Sign in to your TurboTax
2. Open or continue  your return
   • Choose a section from the TurboTax menu and select Pick up where you left off
3. Using the search bar, type K-1 and select the Jump to link from the search results
   • Note: If the Jump to link doesn’t work, select the Federal tab, then under S-corps, Partnerships, and Trusts, select Wages & Income
   • Select Revisit or Start next to Schedule K-1
4. Answer Yes to Do you want to review Schedules K-1 or Q? and follow the prompts
5. Click Edit for the K-1 and Continue to the Did you participate? screen and verify the answer is yes

To enter in TurboTax CD/Download:

1. Sign in to your TurboTax
2. Open or continue  your return
3. Using the search bar, type K-1 and select the Jump to link in the search results
4. This will take you to the Schedule K-1 and Schedule Q screen
   • Note: If the Jump to link doesn’t work, select Personal, then Personal Income
5. Select I’ll choose what I work on and continue until you reach the screen, Your 2022 Income Summary
6. Select Start next to Schedule K-1 under Business Investment and Estate/Trust Income
7. Answer Yes and follow the prompts
8. Click Edit for the K-1 and Continue to the Did you participate? screen and verify the answer is yes

[-Reese-]

Thank you. I’ve done everything you suggested. This is my dependent’s tax return, I’m working on. He has pass-through S Corp business income; that is earned. He does actively participate in the business. I noticed, on the 8615 WKS form that this business income is not filled in on line 2b automatically. Do I need to put it there? I believe that is where it was in the past, when the 8615 wasn’t necessary because all of his income was earned.

[AliciaP1]

Yes, you need to proceed through the interview questions for Child's Income (Under Age 24) in the Less Common Income section of TurboTax.  Continue through the interview for this section until the Other Earned Income section and enter the Ordinary Business Income amount from box 1 of the Schedule K-1 for his S-Corp.  TurboTax is assuming it's passive income due to his age so you just need to enter it as Earned Income to get the appropriate treatment.

@-Reese- 

[-Reese-]

Thank you, so much for the help. This was exactly what I was looking for and it worked.