Form 8615 Line 9 Instructions

[RandlePink]

Hello,

For the 2024 tax year, I am trying to figure out why TurboTax used the Schedule D Tax Worksheet to calculate Line 9 on Form 8615 vs. the Qualified Dividends and Capital Gains Tax Worksheet.

My situation: Form 8615 Line 8 includes amounts from my (parent's) taxable income, which includes qualified dividends.  Line 8 also includes amounts from my son's net unearned income, which also includes qualified dividends (via line 5, I presume).  Based on how I interpret the Line 9 instructions ( https://www.irs.gov/instructions/i8615#en_US_2024_publink28914rd0e523 ), that means I should be using the Qualified Dividends and Capital Gains Tax Worksheet vs. what TurboTax used - the Schedule D Tax Worksheet. 

There is no Schedule J on my (parent's) tax return, and there is no 28% rate gain or unrecaptured section 1250 gain on any of our tax returns.  There is also no Form 2555 filed on the child's return.

Form 8615 lines 1 - 5 are as follows:

1) 2,954

2) 2,600

3) 354

4) 2,504

5) 354

Line 6 is my (parent's) taxable income from my Form 1040, line 15 which is inclusive of qualified dividends.

What am I missing? I am sure I am misinterpreting something but I cannot figure out what.

Thank you!

[rjs · Accepted solution]

I assume you are looking at the Form 8615 Schedule D Tax Worksheet. That's where the tax on Form 8615 line 9 is calculated. TurboTax always uses the Form 8615 Schedule D Tax Worksheet just to simplify its calculations a bit. As long as line 11 of the Form 8615 Schedule D Tax Worksheet is zero, i.e. there is no 28% Rate Gain or Unrecaptured Section 1250 Gain, the result is the same as if the Qualified Dividends and Capital Gains Tax Worksheet were used, and it avoids having to have a separate worksheet in the TurboTax software.

The TurboTax help for the Form 8615 Schedule D Tax Worksheet says "The program always uses the Schedule D Tax worksheet for the computation regardless if there is any 28% rate gains or 1250 unrecaptured gains since it is all inclusive."

[RandlePink]

Thank you very much rjs.  You are correct - I am looking at the Form 8615 Schedule D Tax Worksheet in TurboTax.  And thank you for the explanation that TurboTax always uses the Schedule D Tax Worksheet.  I cannot find that sentence you quoted in the Form 8615 help but that clears that part up as to the why.  And yes, line 11 of Form 8615 is zero.

I found my error, thanks to you.  I entered an incorrect value on one of the lines on the Qualified Dividends and Capital Gains Tax Worksheet, and that threw the remaining calculations off.  After correcting, I do indeed get the same result per your statement, in comparing TurboTax's Schedule D Tax Worksheet resulting tax and the Qualified Dividends and Cap Gains Tax Worksheet resulting tax.  Thank you!

[rjs]

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@RandlePink wrote:

I cannot find that sentence you quoted in the Form 8615 help

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@RandlePink 

Sorry, the reference in my original reply was mistaken. I have corrected it above. The sentence that I quoted is in the help for the Form 8615 Schedule D Tax Worksheet, not the help for Form 8615.