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Your granddaughter would have to file under her name, and yes TurboTax can walk you through this.
IRS Form 8615: Tax for Certain Children Who Have Unearned Income
For 2020, a child must file Form 8615 if all of the following conditions apply:
For tax purposes, the child's "age" is the age on December 31. The child must file the form if any of these conditions apply:
Treatment of unearned income
In general, in 2020 the first $1,100 worth of a child's unearned income is tax-free. The next $1,100 is taxed at the child's income tax rate for 2020. Anything above $2,200, however, is taxed at the rate that applies to trusts and estates, which usually is higher than the child's rate. This tax treatment has gained a nickname: the "kiddie tax." Calculating how much tax applies to the child's income is the purpose of Form 8615.
Information on the form
When filing the form, you must provide the child's name and Social Security Number (SSN) and the name and Social Security Number of a parent, as well as which filing status the parent is using, such as single, joint or married filing separately. The form has three parts:
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