Do I have to claim my child's Alaska PFD of $1600 on my taxes?

[JohnW15 · Accepted solution]

You don't have to report your child's Permanent Fund Distribution on your own return. 

If your child had more unearned income than $1,050, but less than $10,500, then you have a choice to either report it on your child's tax return or your own tax return.

For guidance on how to enter the Alaska Permanent Fund Dividend in TurboTax, please see the TurboTax Help article "Where do I enter my Alaska Permanent Fund Dividend (Alaska PFD)?".  There's a section in the article called What about my child's Alaska PFD? that might be helpful to you.

[Edited 3|16|2020 10:27 am]

[Hal_Al]

Since it is more than $1050, a dependent's filing requirement, it must be reported, either on your return or the child's.

[mj062987]

The 2019 pfd is 1,606. I entered child pfd under less common income, turbo tax saying I dont need to report it and suggesting to delete the form 8814. Im confused that others says need to report more than 1,050 unearned income of child but turbo tax is not letting me report. Pleae help thanks

[Sunnshiine]

Did you find an answer to this? I'm having the same issue. 

[GiseleD]

A child's Alaska PFD needs to be reported, even if it was their only source of income in 2019.

If your child's total income was exclusively unearned (meaning the Alaska PFD, plus interest, dividends, or capital gains distributions—no wages or other income earned by working) and was less than $11,000, you can either report their PFD on your return or your child can report it on their own return.

Otherwise, if your child's unearned income (including the Alaska PFD) is $11,000 or more, they must file their own return.

Follow these steps if you want to include your child's PFD on your return:

1. Select the Federal tab.
2. Select Wages & Income.
3. On the Your income summary screen, scroll down to Less Common Income and select Show more.
4. Select Start next to Child's Income (Under Age 24).

The original post here has more information.

[Multedge]

Same experience here.  Followed the path to 8814 but TurboTax says because it's less than $1050 it will not be reported and 8814 will be deleted.  Perhaps it's because TT wants badly for this income to be reported on a 1099DIV but it is actually reported to us on 1099MISC.  It seems to accept this process:  if I plug in $1606 (2019 PFD) into Ordinary Dividends AND the Alaska PFD field it deducts about $50 from my Federal tax balance.  I am going with this route because entering the info into the area for 1099MISC I have to add it as income for my wife or I which in turn costs us about $400 more in taxes.

[Lyle69]

Enter 1606 in ordinary dividends and Alaska pfd (included in line above) takes out 51$. That should be the right amount. Not very clear on the page that u enter it twice. We all know it costs 50$ per child. 

[DavidD66]

The IRS filing threshold for unearned income received by a minor child for 2019 $1,100. The Alaska Permanent Fund dividend for 2019 is $1,606. Therefore, you have two options for filing on behalf of the dependent: 

1. File a return for the dependent child and claim the dividend on 1099-Misc box 3. 
2. Include the income on your (guardian) return by including Form 8814 in your return. 

[mountainman907]

For 2020, the Alaska pfd was $992.00. When you got to Federal wages and income then to less common income, then to children's income. The second question is your child required to file a return for 2020. On the learn more it asks if they had unearned income over $1100.00. Even when I say yes, and go to my child's income it asks if it's more than 1100 I correctly answer no. Then it tells me my children isn't qualified to enter their income on the 8814. This thread as well as direction on the the tax software is giving mixed advice. if my child's pfd is the only unearned income in 2020 at $992.00 am I required to file it? If so why does the software not recognize this? If it's not required can you please fix the guidance on the turbotax faqs for permanent fund dividend.

[ReneeM7122]

No, you do not have to enter your child's 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 marginal tax rate of the parent(s), which usually is higher than the child's rate.

Here is an article with instructions on how to enter your child's PFD in TurboTax.

https://ttlc.intuit.com/community/entering-importing/help/where-do-i-enter-my-alaska-permanent-fund-...

@mountainman907

[Grizz99]

So to be clear on this, if my dependent childs only income in 2020 is $992 in dividend income (unearned), then that's not taxable AND does not need to reported?

[Hal_Al]

@Grizz99 

Q.  So to be clear on this, if my dependent child's only income in 2020 is $992 in dividend income (unearned), then that's not taxable AND does not need to reported?

A. Simple answer : Yes. 

There are no "clear answers" in taxes.  That said, it is "taxable" but not reportable, because the dependent's  total income is below the filing threshold of $1100. 

[Hal_Al]

You do not report your dependent's income on your return*. If it has to be reported, at all, it goes on his own return. If your dependent child is under age 19 (or under 24 if a full time student), he or she must file a tax return for 2020 if he had any of the following:

1.          Total income (wages, salaries, taxable scholarship etc.) of more than $12,400 (2020).
2.          Unearned income (interest, dividends, capital gains, unemployment, Alaska PFD) of more than $1100.
3.          Unearned income over $350 and gross income of more than $1100
4.          Household employee income (e.g. baby sitting, lawn mowing) over $2100 ($12,400 if under age 18)
5.          Other self employment income over $432, including money on a form 1099-NEC

Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.

In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.

Unearned income includes taxable interest, dividends, capital gain distributions, taxable social security benefits, pensions and annuities, Alaska PFD and Unemployment compensation. Earned income includes wages, tips, and taxable scholarships/fellowships (scholarships are earned income for the purpose of calculating the standard deduction but unearned income for purposes of forms 8814 and 8615). Gross income is total earned and unearned income.

*If his only income is from interest and dividends, Alaska PFD or capital gains distributions shown on a 1099-DIV, there is a provision for entering it on your return, using form 8814. Enter at Less common income / Child's income.

[Grizz99]

Thank you for your response. After I wrote that question I continued to research the issue. I found what appears to be a discrepancy in the Turbo Tax software and I think this is part of what is being pointed out above by mountainman907. Turbo Tax is saying (in below picture) that a childs 2020 PFD needs to be reported.

If I follow the directions (below) it asks "Is your child required to file a return for 2020?" I click "No" because they're not required to file a return as this ($992 dividend) is their only income and is less than the $1,100 threshold. After clicking "No" the next page says, "Since your child is not required to file a return, we wont report his or her income on your return." 

If I follow the directions (below) it asks "Is your child required to file a return for 2020?" and I click "Yes" (even though the answer is "No") the end page says "Your childs income does not qualify to be included on your tax return." 

So there is no way to use the provision to include my childs PFD income on my return since it is below the $1,100.

Question #1 Is the TurboTax page (link provided below picture) incorrect in stating "A child's Alaska PFD needs to be reported, even if it was their only source of income in 2020"?

Question #2 If the Turbo Tax page is correct and the income must be reported, how do I report it on my return or does the software need to be corrected to allow this?

https://ttlc.intuit.com/community/entering-importing/help/where-do-i-enter-my-alaska-permanent-fund-...

@ReneeM7122 @Hal_Al