Kiddie Tax and Form 8615

[JayKepps]

Form 8615 was triggered because my dependent child had taxable scholarship income for college.  Rather than putting this on his return, can I just enter it on my HoH Return and pay the tax since it's going to be taxed at my rate anyway?  This will save him from owing anything.

If so, where do I enter it?

[JillS56]

No, you are not allowed to put his income on your return.   If it needs to be reported (your son is filing a return) then it goes on his separate return.   If it is not enough and your son does not need to file a return then you do not need to report.  

Your dependent child must file a tax return for 2021 if he had any of the following:

1. Total income (wages, salaries, taxable scholarship, etc.) of more than $12,550 (2021).
2. Unearned income (interest, dividends, capital gains, unemployment, taxable portion of 529 distribution) of more than $1100.
3. Unearned income over $350 and gross income of more than $1100
4. Household employee income (e.g. babysitting, lawn mowing) over $2300 ($12,550 if under age 18)
5. Other self-employment income over $432, including money on a form 1099-NEC

[Hal_Al]

If your dependent'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 he has taxable scholarship (essentially earned income), his income  is not eligible for that option. 

[JayKepps]

Yes, my dependent child is filing a return.  It just seems silly to create a form 8615 and saddle him with a payment,  when all that form does is use an equation to tax the overage at MY rate.

[JayKepps]

ALSO,  in true form, there is a glitch with how TURBO records form 8615.  It is marking me as "single".  Yet my filing status is HoH.  I went into forms mode and changed this, but it still calculates tax owed at the single rate.

[JayKepps]

I have to ask.  What is the penalty for using the wrong form , as long as the payment to the IRS remains the same?

[KrisD15]

Please be aware that scholarship income is EARNED INCOME reported on the student's 1040 line 1. 

Is the unearned income (independent of the scholarship income) is more than 2,200, the higher rate will apply and form 8615 is generated. 

Be aware that the student can use the scholarship income they need to claim for an IRA contribution, but that would need to be done by Monday, April 18th, 2022 to claim the deduction for 2021. 

[NCperson]

you have no penalty - because you overpaid what you are due.  HOWEVER, your child would be in 'hot water' because the child has an obligation to file that has not been satisfied.  

Does the child have total income of over $12,550 and unearned income over $2200?  That is what drives the kiddie tax.  Note that the scholarship income is NOT unearned income for this purpose.  

[JayKepps]

To be clear, his scholarship amount which is over the amount covered by qualified expenses is 2501. 

Yes, I see it on 1040 Line 1

So he's being taxed on the 2501 there? And then again through form 8615???  Taxed TWICE?