Minor + RMD = Need to File?

Forum|Forum|4 years ago
March 8, 2022
11 replies
86 views

If a minor (15) is now getting an RMD (about 5k) from an inherited IRA, do I need to file a tax return for him?

Thanks.

Mac

Best answer by ColeenD3

I see.

Because it is a "Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc", not DIV, INT, or capital gains money.

So, I guess I would start a new tax return, for the child, in turbotax, and just go from there?

Thanks.

Mac

Yes. You begin a new return for him. While you can use your own email address, you would need a new user name for him.

MayaD

Alumni - Intuit

Is it distribution from traditional or Roth IRA?

In case of Traditional IRA, RMDs are taxed and, in the case of children under age 18 (or full-time students under age 24), they are taxed at a parent's usually higher rate.

Roth IRAs are a bit different, distributions from inherited Roth IRAs are tax-free. However, the beneficiary will still have to deplete the account within ten years after becoming an adult.

Typically, a child's tax rate is much lower than a parent's tax rate due to having much less income. However, certain types of income, including inherited traditional IRAs, are subject to the kiddie tax, are taxed at the parent's highest tax rate after a certain threshold amount ($2,200 in 2021). This applies to children who are under 18, or, if the child is a full-time student, children under 24.

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MacTiggerAuthor

Level 4

So, do I need to file a tax return for this child, in the child's name?

If taxes are owed, I suppose I would pay the taxes out of my own pocket, as the RMD amount is sitting in an investment account that I don't want to touch.

Thanks.

Mac