I am being asked to fill out an 8615 form on my taxes but I dont live with my parents and they are not able to file taxes.

[macuser_22]

The 8615 is required whether you live with your parent of not if you meet the requirements to file the form.

I don't know what your mean that your parents are not able to file taxes. If you mean that their income is so low that they are not required to file a tax return, then just enter zero for their AGI.

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From IRS Pub 17

https://www.irs.gov/publications/p17/ch31.html#en_US_2016_publink1000174280

Tax for Certain Children Who Have Unearned Income

If a child's interest, dividends, and other unearned income total more than $2,100, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. If the parent doesn't or can't choose to include the child's income on the parent's return, use Form 8615 to figure the child's tax. Attach the completed form to the child's Form 1040 or Form 1040A.

When Form 8615 must be filed.   Form 8615 must be filed for a child if all of the following statements are true.

1. The child's unearned income was more than $2,100.

2. The child is required to file a return for 2016.

3. The child either:

   1. Was under age 18 at the end of the year,

   2. Was age 18 at the end of the year and didn't have earned income that was more than half of his or her support, or

   3. Was a full-time student at least age 19 and under age 24 at the end of 2016 and didn't have earned income that was more than half of the child's support.

4. At least one of the child's parents was alive at the end of 2016.

5. The child doesn't file a joint return for 2016.

[805teresa]

But there are situations (and perhaps the poster of the original question is in such a situation) in which a person who is required to file 8615 has nothing at all to fill in for the very first lines (Lines A and B). Here's an example. A child of divorced parents (neither of whom remarries) turns 18 in 2017. The custodial parent (and sole provider of support) dies the next day. The child never lives with the non-custodial parent. In 2018, the "child" has more than $2100 of unearned income (due to inheritance from the custodial parent), is required to file a tax return, is a full-time student at least age 19 and under age 24 at the end of 2018 and didn't have EARNED income that was more than half of her support, has at least one live parent at end of 2018, and does not file a joint return for 2018. According to the instructions for form 8615, this "child" is required to file form 8615 (and hence to pay the rates of trusts/estates instead of the lower rates rates on individuals), yet this child can't even fill in anything for Lines A and B for 2018 form 8615, since the child did not reside with either parent in 2018. "If your parents were unmarried, treated as unmarried for federal income tax purposes, or separated by either a divorce or separate maintenance degree, enter the name and SSN of the parent with whom you resided for the greater part of the calendar year." What is such a person supposed to do?

[macuser_22]

@805teresa - Note that the above question and answer is at least 2-3 years old and is for a 2016 tax return.  The appear to be a post that was "migrated" from the old TurboTax Answer Exchange (AXE) that now has the date of the time of migration, not the original years old date.   The rules for the 8615 are different for 2018 tax returns.

Ir regard to your question "what is a person to do" -  The form is still required (https://www.irs.gov/pub/irs-pdf/p17.pdf).   It does not matter if you resided with a parent or not See page 200 in Pub 17 for which parent to use. 

Actually because for 2018, the parents income is immaterial, it makes no difference which parent is listed, but the instructions have not been revised to reflect that.

[805teresa]

@macuser_22 Thank you very much for the reply and the explanation about the dating on the original question. I read p. 200 of publication 17 (for 2018), which, as you point out, is irrelevant given that a child who previously (that is, before TCJA) would have paid the relevant parent's rate on her (I'm assuming the child is female) unearned income now pays the trust rate. But my question really is about whether a 19-year old student who is completely self-supporting (and indeed who may support her only living parent) but whose EARNED income provides only a small portion of her support must file form 8615. And if she does have to file that form, is she simply supposed to leave lines A and B empty? It doesn't seem right (and I don't mean by that that it doesn't seem fair, although that's true too, but that it seems like I must be getting something wrong) that such a person has to pay trust rates on unearned income while a similarly situated 25-year old does not. But, that does seem to be what the instructions for 8615 say. Of course, if the word "child" in 8615 means *qualifying child*, then the 19-year old that I am thinking of would pay regular single-filer rates and not have to fill out 8615, since she would be no one's qualifying child. (Maybe one way to make my question clear is this: Suppose a person who was abandoned by her father on the day she was born inherits money from her mother, who dies very young, but after the child turns 18. Does this person really have to pay trust rates rather than single-filer rates on unearned income due to the fact that her father is alive?)

[805teresa]

@macuser_22 a follow-up to my previous post Please see the Figure 30-B flow chart on p. 203 of publication 17 that you so helpfully directed me to: https://www.irs.gov/pub/irs-pdf/p17.pdf. This figure is headed "Do You Have To Use Form 8615 To Figure Your Child's Tax?" So, it seems that the idea behind 8615 is that a *parent* should attach it to their child's tax return. But the 19-year old that I am thinking of has no parent who is filling out her tax return. What I need is a figure that is headed "Do You Have To Use Form 8615 To Figure Your Own Tax?" Notice too that although p. 201 of Publication 17 says, "Special tax rates apply to certain DEPENDENT children" (my emphasis), the instructions for form 8615 specifically say "These rules also apply whether or not you're a dependent". Thank you in advance for any insight you may have.

[macuser_22]

You are reading too much into it and applying conditions that do not apply to you.

The authority is the form 8615 instructions themselves which say:

[quote]

Who Must File
Form 8615 must be filed for anyone who meets all of the
following conditions.
1. You had more than $2,100 of unearned income.
2. You are required to file a tax return.
3. You were either:
a. Under age 18 at the end of 2018,
b. Age 18 at the end of 2018 and didn’t have earned income
that was more than half of your support, or
c. A full-time student at least age 19 and under age 24 at the
end of 2018 and didn’t have earned income that was more than
half of your support.
(Earned income is defined later. Support is defined below.)
4. At least one of your parents was alive at the end of 2018.
5. You don’t file a joint return for 2018.

These rules apply if you’re legally adopted and a stepchild.
These rules also apply whether or not you’re a dependent.
These rules don't apply if neither of your parents were living at
the end of the year.

[end quote]

If you meet those requirements then you are required to file the form with your tax return.   Also note that any reference to "custodial parent" does not apply to anyone that is over the age of 18 in any state where age18 is the age of emancipation - after that there is not such thing as a "custodial parent" - just a parent, but you can be required to file the form up to age 23 if the conditions apply.  Also note that any reference to dependent, or living with a parent also does not apply if you are not a dependent on a parents tax return.  As it says, the only case where the rules do not apply is if neither parent is living.

[805teresa]

Thank you for the swift response. I am unclear what you mean when you say that I am "applying conditions that do not apply to [me]". Which conditions do you take me to be applying that do not apply to the envisioned 19-year old (who isn't me, by the way). Thanks much!

[macuser_22]

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@805teresa wrote:
Thank you for the swift response. I am unclear what you mean when you say that I am "applying conditions that do not apply to [me]". Which conditions do you take me to be applying that do not apply to the envisioned 19-year old (who isn't me, by the way). Thanks much!

---

"Dependent children" for one thing - the actual tax law makes no reference to dependent children.  Having to live with a parent for another - that is not in the tax law.

You also said that I did not address:  "It doesn't seem right (and I don't mean by that that it doesn't seem fair, although that's true too, but that it seems like I must be getting something wrong) that such a person has to pay trust rates on unearned income while a similarly situated 25-year old does not."

I totally agree. the entire  8615 (kiddy tax) is unfair.   It was originally created by Congress to counteract parents who were transferring stocks, bonds and other investments to their children because the child's tax rate was less, so Congress (in it's wisdom) created a law that taxed that income at the parents tax rate (which was changed to the cap. gains rate in 2018).  Why age 23 as a cut off?... I suspect because a student child living at home, no older than 23, can still be a parents dependent.

Tax laws are often unfair - talk to your Congress person about changing it.

[805teresa]

Thank you again. I will definitely talk to my congressperson, if it turns out that the "kiddie tax" applies to people who are not even "kiddies" (that is, who aren't anyone's qualifying child). I haven't been able to find the relevant bits of the US Code for these post-TCJA days, but I doubt that TCJA changes the relevant bit of the old code (26 US Code §1), which I quote from https://www.law.cornell.edu/uscode/text/26/1.

(2) Child to whom subsection applies

This subsection shall apply to any child for any taxable year if—
(A) such child—
(i) has not attained age 18 before the close of the taxable year, or
(ii)
(I) has attained age 18 before the close of the taxable year and meets the age requirements of section 152(c)(3) (determined without regard to subparagraph (B) thereof), and
(II) whose earned income (as defined in section 911(d)(2)) for such taxable year does not exceed one-half of the amount of the individual’s support (within the meaning of section 152(c)(1)(D) after the application of section 152(f)(5) (without regard to subparagraph (A) thereof)) for such taxable year,
(B) either parent of such child is alive at the close of the taxable year, and
(C) such child does not file a joint return for the taxable year.

Here the word "child" is used. If that means "person who is someone's qualifying child", then the f8615 tax would not apply to the envisioned person, but if it means "person who is someone's child", then the f8615 tax also applies to a 19-year old unmarried student who fully supports herself and her one living parent through her unearned income. Such a person is no one's qualifying child, though she is someone's child. I can't find the definition of "child" relevant to the tax law.

It will probably help you to see the force of my question if you know the actual situation that concerns me. The situation is not mine, but rather the situation of someone I know. I will write as though it's my situation though, since it's easier.

My parents divorced when I was very young. Neither remarried. My father never provided any support. My father's tax returns always reported such small earnings as never to be required to pay taxes. (Because he earned so little, he didn't have to pay any child support.) My mother, who was my custodial parent when I was a minor and who earned a solidly middle-class income, died of cancer shortly after I turned 18. I was the sole beneficiary of her life insurance policy and of her retirement accounts. I also inherited our home, which I then sold. In short, my mother left me with the means to generate enough unearned income to support myself and go to college full-time. I work, but my earned income provides only a small part of my support. I do not live with my father at any time during the year. I have never lived with him. My mother is dead, so I don't live with her either. There is no parent I would normally live with if I weren't attending school. **So, I cannot truthfully do anything but leave f8615 lines A and B empty.**

But if I can't truthfully do anything but leave i8615 lines A and B empty, it seems likely that I'm not supposed to be filling it out at all. It seems like f8615 is intended only for people who are someone's QUALIFYING CHILD. But that's not what the "Who Must File" section of i8615 actually says. It says that it must be filed for ANYONE who meets the conditions. I do meet the conditions. I have more than $2100 of unearned income. I am required to file a tax return. I am a full-time student at least age 19 and under age 24 and didn't have earned income that was more than half of my support, at least one of my parents is alive, and I don't file a joint return. The rules are stated to apply whether or not I'm a dependent. I'm not a dependent (obviously, since I'm no one's qualifying child), so the rules apply. But if they apply, then that means that my unearned income (RMDs from my mother's retirement plans) will put me into the 37% marginal rate for trusts instead of the 12% rate for single individuals that it would otherwise put me in. All because some man I don't even know (my father) happens to be alive? It seems to me very unlikely that that's what tax law actually dictates. It seems much more likely that there's just a little bit of bad writing of i8615.  What do you think?

I so much appreciate your taking the time to respond.

[805teresa]

@macuser_22 

You wrote: "Congress (in it's wisdom) created a law that taxed that income at the parents tax rate (which was changed to the cap. gains rate in 2018)."

Can you tell me why you think this? You're the second person who I've seen summarize the TCJA change in the 8615 tax in this way. But, as far as I can tell, under TCJA, the way a "child's" income is taxed depends on the kind of income it is. A "child's" EARNED income is taxed in accordance with her own brackets, UNEARNED income FROM THINGS BESIDES qualified dividends and LTCG (such as RMDs from an inherited retirement account) is taxed according to trust brackets (which hit 37% at $12,500 as opposed to $500,000 for an individual), and UNEARNED income from QUALIFIED DIVIDENDS and LTCG is taxed according to trust brackets (but given the standard preferential treatment, so no higher than 20%). I'd love to be wrong about this, so please convince me! Thank you!

[macuser_22]

---

@805teresa wrote:

@macuser_22 

Can you tell me why you think this? You're the second person who I've seen summarize the TCJA change in the 8615 tax in this way. But, as far as I can tell, under TCJA, the way a "child's" income is taxed depends on the kind of income it is. A "child's" EARNED income is taxed in accordance with her own brackets, UNEARNED income FROM THINGS BESIDES qualified dividends and LTCG (such as RMDs from an inherited retirement account) is taxed according to trust brackets (which hit 37% at $12,500 as opposed to $500,000 for an individual), and UNEARNED income from QUALIFIED DIVIDENDS and LTCG is taxed according to trust brackets (but given the standard preferential treatment, so no higher than 20%). I'd love to be wrong about this, so please convince me! Thank you!

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Of course.  We are only discussing unearned income.  See: https://www.congress.gov/bill/115th-congress/house-bill/1 "‘(4) SPECIAL RULES FOR CERTAIN CHILDREN WITH UNEARNED
INCOME.—"  that describes the exact change that Congress made and the exact tax rates that apply.  (Capital gains rate is just a simplified way to say it, but not exact.)

I agree with Carl that this seems more like a homework question rather than a real life tax questions so I will not respond further.  
‘

[805teresa]

It is a real life tax question. I know that it is hard to believe, but it is. I honestly would appreciate your help and Carl's.

[macuser_22]

Sorry but I cannot help further.  I have posted the instructions and the link to the actual law that REQUIRES the form if you meet the requirements - there are no exceptions.

In the rare cases that the information cannot be supplied such as parents not US residents or unknown, then the only advice is to leave the parents information blank and write "unknown" or "not a US resident" in the box and mail the return otherwise I suggest seeing a tax professional or call the IRS for guidance.  That will not negate the tax that is owed. If a parent is living and you meet the requirements then the tax is owed whether or not you have the necessary information.

Since we cannot convince you and you continue to argue about what is settled tax law then I suggest you sit down one-on-one with a tax professional and discuses it.

[jshell]

I was 17 years old end of 2019.  My father died in 2018 and I live with my court appointed Guardian and I pay all my expenses.  She is not claiming me on her 2019 tax return because she does not pay over 50% of my expenses.  I tried to file my taxes but this pesky form pops up wanting to know my living parent information.  I have not seen my mother in over 10 years.  If I say both of my parents are deceased, I am lying and if I say only one is deceased it wants her information which I have no way of getting. What do I do?