How to Handle Children's Interest

[EThree1]

Good evening,

I have two minor children who received 1099-INTs for interest on savings account and a CD.  I'm the joint owner on them, but the 1099's were addressed to the children.  The amount of interest was under 1,000 dollars.  They have no other earnings.

My question: Because I'm a joint owner, do I need to add those to my return?  Or are they considered not reportable because they are under the threshold of the filing for the children. 

[MaryK4]

Since the interest is under $1,250 (the 2024/2025 standard deduction for dependents with only unearned income) and the 1099-INTs are in your children's names and Social Security numbers, you generally have two choices:
 

1. If each child’s total unearned income (interest, dividends, etc.) is under $1,250, they are not required to file a federal tax return. Because the 1099-INT was issued in their SSN, the IRS attributes that income to them, not you. Since they are under the filing threshold, the income is essentially "tax-free" and does not need to be reported anywhere.

2. You could choose to report their interest on your own return  if the interest is between $1,250 and $12,500. However, since your children's interest is under $1,000, there is no tax benefit to doing this; in fact, it could actually increase your tax bill because that income would be taxed at your higher marginal rate instead of the child's 0% rate.