Q. As guardian of our 19 year old grandchild, she is claimed as a dependent on our tax return. Do I fill out the parent section with my info needed on form 8615?
A. No. If form 8615 is needed, it is filled out with the parent's income info, even though the parent is not claiming the dependent.
Q. Or do I not need this form filled out?
A. If form 8615 is needed, TurboTax (TT) will automatically generate it. This happens when the child has more than $2600 of unearned income (interest, dividends, capital gains, unemployment, taxable portion of 529 distribution and sometimes taxable scholarship*).
*Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the $14,600 filing requirement (2024) and the dependent standard deduction calculation (earned income + $450). It is not earned income for the kiddie tax and other purposes (e.g. EIC). For grad students and post grad fellows, scholarship, stipend and fellowship income is earned income ("compensation") for IRA contributions.
Taxable scholarship goes on line 8r of Schedule 1, from which TT treats it as hybrid income.
