CUSTODIAL 1099

[boss89]

I was curious if I need to file/report the 1099 or multiple 1099's (haven't received them yet but I will) for our kids custodial accounts even if they didn't earn more than $1,100 in unearned income and they don't have any other sort of income. If yes would I just attach it to my own return with form 8814 for simplicity or would I need to file it under their own tax return?

If I don't need to would I only have to worry about it once they make over that $1,100 threshold? Trying to figure everything out. My kids are young and won't be having any earned income for quite some time. 

Thank you

[Bsch4477 · Accepted solution]

When a dependent's unearned income is greater than $1,100 in 2020, the dependent must file a tax return.  If under that amount and there is no earned income and if no tax was withheld there is no need to file. 

[boss89]

I will fix my post to have the updated amount of $1,100. Does that mean I don't need to attach it to my return NOR file a seperate return for the kids since neither earned $1,100 or more? 

Over $1,100 I need to add the cusodial 1099's to my return OR file a tax return for each child who is over that amount?  I also heard that under certain circumstances that the child MUST file their own seperate return. Do you know what those would be? Just trying to understand all these rules as best as I can

Thank you

[Bsch4477]

Correct. You don’t have to do anything this year. The Kiddie Tax rules can be complicated and seem to change frequently. The updated rules can be found here:

https://proconnect.intuit.com/taxprocenter/tax-law-and-news/kiddie-tax-resets-for-2020/amp/

[boss89]

Dumb question. I can't see anywhere that says anything under $1,100 doesn't need to be filed.  Is the $1,100 pretty much basic knowledge because thats the basic standard deduction? Appreciate any clarification. I just like having something that I can print off or that says it plainly just in case I need it for reference. 

[Bsch4477]

From IRS Pub 17:

Single dependents—Were you either age 65 or older or blind?
No. You must file a return if any of the following apply.
• Your unearned income was more than $1,100.
• Your earned income was more than $12,400.
• Your gross income was more than the larger of:
• $1,100, or
• Your earned income (up to $12,050) plus $350

[boss89]

Thank you!