She didn't get the money because of her age. Her account earned income and is reported. If her only income is unearned income, then we look next at the amount. According to saving for college a child’s unearned income may include:
- Taxable interest
- Dividends
- Capital gains
- Taxable scholarships
- Income produced by gifts from grandparents
- Income produced by custodial accounts under the Uniform Gifts to Minors Act (UGMA)
If the child's income is $14,600 or more, it must be on the child's own tax return. It cannot be included on the parents' tax return. If less, it can go on the parent's return.
See What is the Kiddie Tax? to know what should be reported where and how.
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