Do I have to file a Michigan 1040 for my child if I filed a 8814?

[matttt22]

I filed a 8814 for both of my children on my tax return. 

One had $2,700 in interest and the other one had $1,600 in interest. All interest was also from Treasury bills so they are exempt from Michigan income tax regardless.

For Michigan, I know they have to file an income tax return if they (1) filed a federal return or (2) made over their personal exemption.

Since they did not make over their MI exemption, number 2 does not apply. But does filing a 8814 count as having filed a federal return, thus requiring me to file a MI-1040 for each child?

[MaryK4]

No, your children would not have to file the Michigan state tax return, even though they would have had to file a federal tax return if you had not reported the interest income on the 8814.  Michigan uses the federal AGI as the starting point, so since the 8814 income is included on your tax return, it will be subtracted out on your Michigan return on the Schedule 1.  (The income is accounted for on your return.)  This would be in contrast to a situation where they would be required to file their own federal return because of earned income.