Kiddie Tax Help

[kip20]

My son has unearned income of $2212, so I'm filling out his own return. Of that $2212, $2200 is from long term capital gains, and $12 is from dividends. 

Turbotax is calculating a federal tax of $111, but shouldn't the tax only be on the $12 that is over $2200?

[MarilynG1]

In general, in 2020 the first $1,100 worth of a child's unearned income is tax-free. The next $1,100 is taxed at the child's income tax rate for 2020 (10%), so $111 tax sounds correct.

Click this link for more info on Form 8615.

You can include your child's income on your return under certain conditions. 

This link gives info Reporting Child's Income on Parent's Return.

[kip20]

Understood, but again...the next $1100 is long term capital gains and qualified dividends, which should be taxed at 0%, no?

[npierson7]

No, it is not correct. Only amount of qualified dividend wont' be taxed in your case. Long term capital gain is taxable amount.  

[kip20]

This is incorrect; I ended up using another tax filing software that filled out the 8615 correctly. I'm not sure where the issue lies, but I don't have the time to figure it out.