My daughter is a 21-year old full time student who also works and had a gross income of $2,578. I was told by my insurance agent that I must enter her income on my return, and that she can not, as I am unemployed and getting a monthly tax credit toward the health insurance I have for she and I. I am also claiming her as a dependent this year. The language in TurboTax is very confusing to me and seems to contradict itself regarding the rules in this regard. I provided approximately 90% of her support and college expenses, and all of her health insurance and medical care by the way. Below is the language I find confusing and my reason for needing clarification:
Child's Income
What is Child's Income?
If your child is younger than age 19 or a full-time student age 19-23, he or she must file a tax return for 2021 if he or she had any of the following:
- Unearned income (interest, dividends, capital gains, taxable scholarships, unemployment compensation) of more than $1,100. (She did not)
- Earned income (wages, salaries, tips, and fees) of more than $12,550. (She did not)
- Gross income (earned and unearned income) was more than the larger of:
$1,100 or earned income (up to $12,550) plus $350 (Seems to contradict sentence above)
If your child is younger than 19 or a full-time student age 19-23 and is required to file a return, you may be able to report the child's income on your return using Form 8814, Parent's Election to Report Child's Interest and Dividends. If you do, the child is not required to file a return.
If you decide not to report your child's income on your return, or you don't qualify to use Form 8814, the child must file a return, and may have to file Form 8615, Tax for Certain Children who have Unearned Income of More Than $2,200.
Note: If your child had earned income (wages, salaries, and tips) you are not allowed to enter that income on the parent's return. (Seems to contradict much of the above. If true, I have my answer -do not report her income on my return, but she will report on hers. All other language is unnecessary! However, if this is the case, I will be penalized for the amount of my tax credit that is for her, according to my insurance agent) I would appreciate your assistance.
Thank you!
What Paperwork Do I Need?
- Form 8814
- Form 8615
