Child's Income (Under Age 24)

[taxdrama]

I finished my undergrad in 2025 and am doing paid full time internship and then heading back to med school in few months. Under the "Less Common Income" section, there is a subsection on "Child's Income (Under Age 24)" which asks lot of questions like if my parents are deceased or married and what is their income, etc. When I fill this subsection my tax liability goes up significantly. Am I supposed to fill this subsection? My parents are claiming me as their dependent but I am filing my own tax return.

[taxdrama]

The paid internship was with NIH, which issued a 1099-G for about $18K and showed it as Taxable Grants. Sharing to see if this is the reason I am being forced by TT to work on Form 8615, Tax for Certain Children Who Have Unearned Income. My other unearned income is about $150 in bank interest and $19 in dividends. I am also a self-employed tutor from where I earned about $5K in 2025.

[MelindaS1]

No, that section is for - for example - if your parents were filing a tax return and claiming you as a dependent on that tax return, as well as electing to report your income on THEIR tax return, being taxed at their marginal rate. Because you are filing your own tax return as an adult, you need to delete your entries from that section and report your 1099-G in a different section: 

1. Federal on the left-hand side menu
2. Wages & Income
3. Other Common Income (1099-G)
4. Government Payments

If you're unable to back out and delete your entries from the menu where you are, see this FAQ: How do I view and delete forms in TurboTax Online?

See also: IRS - Instructions for Form 1099-G (03/2024) (highlighted)

[Opus 17]

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@taxdrama wrote:

The paid internship was with NIH, which issued a 1099-G for about $18K and showed it as Taxable Grants. Sharing to see if this is the reason I am being forced by TT to work on Form 8615, Tax for Certain Children Who Have Unearned Income. My other unearned income is about $150 in bank interest and $19 in dividends. I am also a self-employed tutor from where I earned about $5K in 2025.

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Yes, this can be a problem.  When a child is under age 24 (and meets certain other conditions) and has certain income, it can be taxed at a higher rate.  This is meant to capture parents who put investments in a child's name, but it can also affect an adult child who gets certain types of income.

A 1099-G is not the right kind of tax statement for this income, it probably should have been on a 1099-NEC. Whether or not it would be reported as self-employment income or an educational stipend depends on whether this was part of a degree program or something you did after, and I would have to do more research on that.  (Sometimes, companies "hire" people and falsely call them interns.  For a real internship, it must be educational to the intern and the intern can't be a substitute for an employee--can't do the same duties as an employee, for example.). A don't think there is a problem classifying an NIH internship as educational.  But the problem is that it is still "unearned income" which triggers the higher tax rate.

I need to ask another expert for help on this,

@DoninGA 

@Hal_Al 

[Hal_Al]

AS @MelindaS1  said, you do not report this income in the  "Less Common Income/ Child's Income (Under Age 24)" section of TurboTax.  In that section, you report the information about your parents so that TT can calculate the tax on form 8615.  You still have to enter the income in some other section. This section is also used by some parents  (not in your case) to report a child's unearned income on the parents return (form 8814 is used instead of 8615).  (EDITED)

As others have indicated, YOU have to decide how to report this income. Your choices are:

1. Other (misc) income. It will treated as unearned income and subject you to the "kiddie tax" (form 8615). But you avoid the self employment tax (SET).

2. As self employment. No kiddie tax, but you pay SET, in addition to income tax. For estimating purposes, SET is 15% of the $18K income and the $5K tutoring income

3. Stipend/Scholarship income.  Research and post graduate stipends are usually reported as scholarship income. I think that is probably where your income should go.*

You avoid SET. Scholarship income is a hybrid between earned and unearned income. It is earned income for purposes of the $15,750 filing requirement (2025) and the dependent standard deduction calculation (earned income + $450, not to exceed $15,750).  It is not earned income for the kiddie tax and other purposes (e.g. EIC).  For grad students and post grad fellows, scholarship, stipend and fellowship income is earned income ("compensation") for IRA contributions.  Since your increased standard deduction will wipe out most of your taxable income,  a smaller portion will be subject to the kiddie tax.

*How to Enter scholarship/stipend:

Enter at Educational Expenses and Scholarships, under Deductions and credits (not the income section).

After answering no to having a 1098-T**, answer yes to qualifying for an exception (that gets you to the entry screens). You will have to go thru the whole education interview to get to the scholarship screen. At the scholarship screen, enter the amount of the grant. When asked if any was used for room and board, answer yes. Then enter the amount you want to be taxable (usually all of it), in the pop up box. R&B are not "qualified educational  expenses".  So, this is how you tell TT that it is taxable. Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B.  This will put it on line 8r of Schedule 1, from which TT treats it as hybrid income.

**If you do have a 1098-T, one of the follow-up questions will be do you have any scholarships not shown on the 1098-T. Enter the additional scholarship/stipend there.  

[Opus 17]

And just to clarify my own answer, we are talking about the "kiddie tax" and there are two ways to approach this.

The section for "report a child's income on your return" only applies to your child, which is not the case.

However, if you are under age 24 and have certain types of income, then your income can be subject to the higher kiddie tax rates instead of the normal rates, and you may be asked some extra questions and you will see a higher rate in some cases.  See @Hal_Al 's answer for your options.  

Note that if you report the income in the educational section, you should delete the 1099-G from that section.  If the IRS sends an automated letter asking about the 1099-G, you can explain that you reported it in the scholarship section. 

[taxdrama]

Thank you all for your responses. I understand that I should not be filling out the "Child's Unearned Income" section as that is for my children (which is not the case). However, if I skip that part (and having entered 1099-G in "1099-MISC and Other Common Income"), TT flags error when I reach the end for review. And, then it takes me to "Child's Unearned Income" section and starts asking me questions about my parent's filing such as if they filed jointly, if they are married, their taxable income, etc. If I fill out this section, my tax shoots up dramatically (because of my parents tax rate). So, even though the "Child's Unearned Income" section seems to be for my children, but the questions there are for my parents. Am I doing something wrong?

[taxdrama]

To add, the "Child's Unearned Income" section states that, "Now, we'll help you complete Form 8615, Tax for Certain Children Who Have Unearned Income." And, then it asks questions about my parents' filings.

[Hal_Al]

It is proper that you are getting those questions. You ARE subject to the kiddie tax  and most of the $18K will be taxed at your parent's tax rate. 

Yes, your tax will shoot up dramatically because it was entered as unearned income. Unearned income over $2700 is subject to being taxed at the parent's tax rate (the kiddie tax).

[taxdrama]

You are saying "Your "Child's Unearned Income sub section" is different from the section  that  your parent's would get." I am also saying the same thing. But TT keeps taking me there. Where can I find the parents' section? I am fine if I have to pay kiddie tax. What I want to know is why is TT forcing me to fill my parents' info under "Child's Unearned Income sub section"? Please help.

[Opus 17]

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@taxdrama wrote:

To add, the "Child's Unearned Income" section states that, "Now, we'll help you complete Form 8615, Tax for Certain Children Who Have Unearned Income." And, then it asks questions about my parents' filings.

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This is correct.  In this case, you are the "child" (because you are a full time student under age 24), and you will use form 8615 to calculate the correct tax.  That form requires some information from your parents, to determine how much of the extra "kiddie" tax you will pay on your stipend, because your parents' income and taxes affect your taxes because you are a child under age 24 who is a full time student.

[taxdrama]

I am going to fill my parents' info in the Child's Income section. I wish TT did not ask parents' info in the "Less Common Income" section. Makes it confusing. Thank you all.

[Hal_Al]

@taxdrama  said "I am going to fill my parents' info in the Child's Income section."

Let us know how that  works out  for you.

It now appears, to me,  that I was partially wrong, earlier.  That section is used by either  the parents of such a student or the student himself.  I just tried it on my desktop Deluxe, both ways. TurboTax (TT) recognizes which type taxpayer you are, from your personal info, and directs you to correct interview. 

I think you still do not  report this income in the  "Less Common Income/ Child's Income (Under Age 24)" section of TurboTax.  In that section, you report the information about your parents so that TT can calculate the tax on form 8615.  You still have to enter the income in some other section. This section is also used by some parents  (not in your case) to report a child's unearned income on the parents return (form 8814 is used instead of 8615). 

[Hal_Al]

Last reply edited

[MelindaS1]

It's possible the program wants you to clear your entries out of the "Your Child's Income" section before letting you put the income elsewhere, and that is why you were experiencing a looping issue. Are you using TurboTax Online or TurboTax Deluxe on Desktop for Windows/Mac? It may work both ways on desktop, but I just tested it, and it seemed to work only one way on TTO (TurboTax Online).

Please disregard if you make it to the end with no errors or e-file issues, and if your print PDF Form 1040 looks alright. @taxdrama 

I agree that this is a taxable scholarship that qualifies as unearned income, not subject to self-employment tax. You definitely want Form 8615 attached to your return. These are the requirements:

Who Must File 

Form 8615 must be filed for any child who meets all of the following conditions. 

1. The child had more than $2,700 of unearned income. 

2. The child is required to file a tax return. 

3. The child either: 

a. Was under age 18 at the end of 2025, 

b. Was age 18 at the end of 2025 and didn’t have earned income that was more than half of the child's support, or 

c. Was a full-time student at least age 19 and under age 24 at the end of 2025 and didn’t have earned income that was more than half of the child's support. (Earned income is defined later. Support is defined below.) 

4. At least one of the child's parents was alive at the end of 2025. 

5. The child doesn’t file a joint return for 2025.

The form is definitely available in TurboTax Online, but possibly only for parents to attach to their return if filing a Form 8814 as well. I do know from prior discussion that you can populate this form and report the income on the dependent's own tax return using this treatment if you do so using the desktop software.