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Business & farm
The absence of the alert that you are suggesting is not really an error. You are asking for a new feature. But it would be nearly impossible for TurboTax to determine whether filing a separate return for the child would save money, and it would be a huge programming effort with practically no benefit.
The only advantage to using Form 8814 (reporting a child's interest and dividend income on the parent's tax return) is that it's a bit less paperwork, and it might possibly save the cost of a separate return if the child's return cannot be filed for free. But there is a very long list of possible disadvantages, some of which could be significant. There are only a couple of very unusual situations where using Form 8814 would save money. So the safest course is to never use it. Either you will save money by not using it, or it won't make any difference. It's extremely unlikely that you would ever save money by using it.
Because of the large number of things that can be affected by using Form 8814, there is no simple way to calculate whether filing a separate return for the child would save money. The only way to do it is to prepare complete tax returns both ways and compare the results. It's simply not practical for TurboTax to do this. And there's almost no benefit to doing it since, as I said, it is extremely unlikely that using Form 8814 would save you money. So I doubt that the feature you are asking for would ever be added to TurboTax.