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ajjuly22
New Member

It is saying that I have to fill out "Tax for Certain Children Who Have Unearned Income" and I'm not sure why

 
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Hal_Al
Level 15

It is saying that I have to fill out "Tax for Certain Children Who Have Unearned Income" and I'm not sure why

To prevent the shifting of assets to children, so the investment  income is taxed at the child's lower rate, Congress established the "Kiddie Tax", where a child's investment income is taxed at the parent's marginal tax rate.

Assuming you are the kiddie and not the parent, TurboTax has sensed that you qualify and is requiring you to prepare form 8615.

If you are the parent, you actually have to initiate form 8814 yourself. TurboTax doesn't do that.

If a child's only income is from interest and dividends, Alaska PFD or capital gains distributions shown on a 1099-DIV, there is a provision for entering it on the parent's return, using form 8814. Enter at Less common income / Child's income.
But, it is usually best for him to file a separate return, as qualified dividends and capital gain distributions could be taxed at a higher rate on the parent's return. 

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1 Reply
Hal_Al
Level 15

It is saying that I have to fill out "Tax for Certain Children Who Have Unearned Income" and I'm not sure why

To prevent the shifting of assets to children, so the investment  income is taxed at the child's lower rate, Congress established the "Kiddie Tax", where a child's investment income is taxed at the parent's marginal tax rate.

Assuming you are the kiddie and not the parent, TurboTax has sensed that you qualify and is requiring you to prepare form 8615.

If you are the parent, you actually have to initiate form 8814 yourself. TurboTax doesn't do that.

If a child's only income is from interest and dividends, Alaska PFD or capital gains distributions shown on a 1099-DIV, there is a provision for entering it on the parent's return, using form 8814. Enter at Less common income / Child's income.
But, it is usually best for him to file a separate return, as qualified dividends and capital gain distributions could be taxed at a higher rate on the parent's return. 

View solution in original post

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