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Elo-5000
Returning Member

Kiddie Tax and Process

My son has unearned income of $1,125, does I need to file a return for him?     Should be a day if he has  unearned income exceeding $2000, what are my obligations?   Do i file a return under his social or report it under my return?  If I have to report it under my report, how do that using turbo tax  when i input my info under wages and income?

5 Replies
DanaB27
Employee Tax Expert

Kiddie Tax and Process

Yes, your son will need to file his own 2020 tax return if:

  • Your earned income (money you made by working) exceeds $12,400
  • Your unearned income (interest, dividends, capital gains, etc.) exceeds $1,100
  • Your business or self-employment net income (gross minus expenses) is at least $400
  • Your gross income (earned plus unearned) exceeds the larger of $1,100 or your earned income (up to $12,050) plus $350

Please make sure that his return is marked that he can be claimed as a dependent.

 

Please see What is the 2020 Kiddie Tax? and How do I report and pay the Kiddie Tax on my 2020 return? for when his unearned income exceeds $2,200.

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Elo-5000
Returning Member

Kiddie Tax and Process

 

DanaB27

Thanks for responding to my inquiry.   Just to reconfirm that  we are on the same page.

 

1) Its my understanding if my son has unearned income of less than $2,200--a income tax filing is not required -correct?

 

2) When my son does have unearned income more than $2200, then he would need to file an income tax return -correct 

DanaB27
Employee Tax Expert

Kiddie Tax and Process

No, your son will have to file a tax return for 2020 because his unearned income was over $1,100, you stated it was $1,125.

 

But the Kiddie Tax won't apply until his unearned income exceeds $2,200.

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Elo-5000
Returning Member

Kiddie Tax and Process

Thanks for the clarification.  Can you please tell what IRS publication I can reference that talks about this in greater detail?  Also, one last question.  What income level does a child have to file an income tax return rather it be through unearned or earned income and what IRS publication can I reference for this?

DanaB27
Employee Tax Expert

Kiddie Tax and Process

Please see IRS Pub 17 page 8 Table 1-2 for filing requirements for dependents:

  • Your earned income (money you made by working) exceeds $12,400
  • Your unearned income (interest, dividends, capital gains, etc.) exceeds $1,100
  • Your business or self-employment net income (gross minus expenses) is at least $400
  • Your gross income (earned plus unearned) exceeds the larger of $1,100 or your earned income (up to $12,050) plus $350

 

Please see IRS Topic No. 553 Tax on a Child's Investment and Other Unearned Income (Kiddie Tax) and  Publication 929, Tax Rules for Children and Dependents  for more information on the Kiddie tax.

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