You never enter a child's income on a parent's tax return. You must file a tax return in the child's name to report the 1099-R and pay any tax owed. If you are only withdrawing contributions, it won't be taxable, but you may be required to file to put that in writing. If the withdrawal includes earnings, they are taxable with a 10% penalty for early withdrawal. If there is a penalty, it is not subject to the standard deduction, so even if the child's total income is less than $13,700 and no income tax is owed, the penalty is still owed.
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