No, you do not report this on your tax return even though you claim your child. As far as the federal return, the amount is in box 3, so there is no tax on it unless your child has other income to report.
Yes. In PA, the return must be filed for your child. PA requires a tax return when $1 of calculated tax is produced even if tax forgiveness might apply. The tax rate in PA is 3.07% which hasn't changed in many years and that means that $33 dollars creates tax of $1.00. If you as a parent qualify for tax forgiveness in PA, then your child will likely qualify as well.
PA Tax Forgiveness - Provides the Eligibility Income Tables as well.
- A dependent child may be eligible to claim tax forgiveness only if he or she is a dependent on the PA-40 Schedule SP of his or her parents, grandparents, or foster parents and the child’s parents, grandparents, or foster parents are eligible for tax forgiveness. Dependent children whose parents, grandparents, etc. are not required to file a PA-40 Individual Income Tax Return but would qualify for tax forgiveness if they were required to file are also eligible for tax forgiveness.
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