Child has $800 unearned income of bank interest

[DatBio]

My child has bank interest of $800 (unearned) in 2022 and I included those interest as part of my overall interest as my income.

Q1: Since this is an unearned income for my child and it is less than $1250. Therefore, my child is not required to file a tax return. Is this right?

Q2: I want to amend my 2022 tax return to remove my child's interest portion from my own.  By doing so, we are not reporting my child's unearn income at all.  Is this correct to do so?

Thanks in advance!

[Hal_Al · Accepted solution]

Q1: Since this is an unearned income for my child and it is less than $1250. Therefore, my child is not required to file a tax return. Is this right?

A1. Yes.

Q2: I want to amend my 2022 tax return to remove my child's interest portion from my own.  By doing so, we are not reporting my child's unearned income at all.  Is this correct to do so?

A2. Yes.  The amount is under the filing threshold.* 

It may not be necessary for you to file an amended return, if you entered it in correctly in TurboTax (TT).  TurboTax should have calculated $0 tax on the child's interest income.  Look to see if TT prepared form 8814 (Parents’ Election To Report Child’s Interest and Dividends).  Box 1 on line 16 of form 1040 would be checked. 

*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 2023 if he had any of the following:

1.          Total income (wages, salaries, taxable scholarship etc.) of more than $13,850 (2023).
2.          Unearned income (interest, dividends, capital gains, unemployment, taxable portion of 529 distribution) of more than $1250 (2023).  
3.          Unearned income over $400 and gross income of more than $1250 (2023)
4.          Household employee income (e.g. baby sitting, lawn mowing) over $2600 ($13,850 if under age 18)
5.          Other self employment income over $432, including money on a form 1099-NEC