Was this a joint or a custodian account?
All owners of a joint account pay taxes on it. On a custodial account The IRS considers the minor child the owner of the account, so the earnings in it are taxed at the child's tax rate, if at all. Every child under 19 years old—24 for full-time students—who files as part of their parents' tax return is allowed a certain amount of “unearned income” at a reduced tax rate. When you open a custodial account -- also called a Uniform Gift to Minors Act account, or UGMA account -- you provide the bank or credit union the child's Social Security number. The interest earnings are taxable to the child.
However, If this is really a joint account and the joint account earns interest, you may be held liable for the income produced on the account. For most accounts co-owned by parent and child, usually only the parent’s Social Security number is on the account. The bank will then send the parent the Form 1099-INT showing the full amount of interest earned during the year. Unless your child made deposits to the account, you must report the entire amount on your taxes. If your child contributed a significant portion of the funds and you receive the Form 1099-INT, you can share the tax liability proportionally by filing a Form 1099-INT for your child’s share with both the Internal Revenue Service and your child.
Answers are correct to the best of my ability but do not constitute legal or tax advice.
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