Based on your posts, I am assuming that your daughter is under the age of 18 as that is the age at which the parent has to report any unearned income on their tax return and not on hers. If she is, and you choose to do so (report her information on your tax return), you do not need to file for her as all of the information (including withholding amounts) will flow through your return.
If she is above age 18 and (I am sure) under 24, then the TurboTax system will decide as you fill out the questionnaire for her what all the program will or might need from you for information. However, as I walk through the system pretending to be you and enter all above information as you have provided, I am not getting any errors or alerts asking for "my parents" line 15 taxable income. It takes me right to the page where it is telling me that I will be receiving a refund of $1556 FED and $120 PA. Please try again from the beginning as I am thinking you must have clicked on something you did not need to.
Further information for you (but I do not believe it applies to you, just some FYI):
The Kiddie Tax for 2020 and Later
Under these rules, children pay tax at their own income tax rate on unearned income they receive up to a threshold amount--for 2020, the threshold is $2,200.So, the PA PUA is only nontaxable up to the first $2,200.
Note, per PA Dept of Revenue,All benefits are considered gross income for federal income tax purposes.
This includes benefits paid under these programs:
- Unemployment Compensation (UC)
- Pandemic Emergency Unemployment Compensation (PEUC)
- State Extended Benefits (EB)
- Trade Adjustment Assistance (TAA)
- Pandemic Unemployment Assistance (PUA)
- Federal Pandemic Unemployment Compensation (FPUC)
- Lost Wage Assistance (LWA)
The department reports these benefits to the Internal Revenue Service (IRS) for the calendar year in which the benefits were paid.
These benefits are not taxable by the Commonwealth of Pennsylvania and local governments.
