Yes, right. Since you (the account contributor) made the correction before the tax deadline, you (the contributor) do not need to pay a tax on the excess. The earnings are taxable income to the beneficiary but it is passive income which means it can be claimed on:
- the child's return or
- the parent.
Since the child is not filing, we move to the kiddie tax requirements for your return.
The first $1300 of passive income is not taxed to a child. This means no filing necessary on either return.
Reference: What is the Kiddie Tax?
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