No Tax due but Comparison showed tax due at parents rate

[Denisen]

I am a college student filing single with someone can claim me, but won't. My earned income is very low and I primarily pay for school and living from an investment account my grandmother, who passed away years go, setup for me when I was young. My parents only pay for my car insurance and gas, but are not claiming me and don't pay for my living or college. After completing all the tax forms, including the child tax information with my parent's income details and my sister's 8615 details, turbotax indicated the tax comparison required me to pay a $500 of tax at my parent's rate. However, the federal tax due shows $0. So I am confused, do I need to may a payment or not? And if so, do I have to do it separately?

[LindaS5247 · Accepted solution]

If your Federal tax due shows $0 after you have completed all sections of your tax return, you do not owe an additional payment. The tax comparison may refer to taxes at your parent's rate, but is likely not your final tax liability. If Line 37 of your Form 1040, The Amount You Owe shows $0, no payment is needed. 

You can verify this by previewing your tax return to make sure your Line 37 of your Form 1040 is $0, as follows:

 For TurboTax Desktop:

1. Click on Forms at the top right of your TurboTax program to  switch to Forms Mode, and then
2. Scroll through your forms in the left panel and 
3. Click on the form you want to preview (Form 1040)

For TurboTax Online: 

1. Go to "Tax Tools" in your left panel,
2. Select "Tools" and then 
3. Select "View Tax Summary" and 
4. Select "Preview Form 1040"

The term "tax at parents' rate" often is in reference to the Kiddie Tax, which applies to unearned income over a certain amount. If your income or tax liability was low enough, this may have been offset, resulting in $0 owed. It will show on Line 23 of your tax return, which comes from Schedule 2. It's hard to tell without seeing your actual tax return information.

See these links for additional information:

How do I preview my TurboTax Online return before filing?

How do I preview my return in the TurboTax Desktop software?

What's the Kiddie Tax?

Please return to Community if you have any additional information or questions and we would be happy to help.

[rjs · Accepted solution]

LindaS5247 has answered your question. Just for your information, and for anyone else who reads this, the requirement to pay kiddie tax does not depend on whether someone can claim you as a dependent, or on whether someone does claim you as a dependent, or on how much support your parents provide. Those factors are not considerations for determining whether you are subject to kiddie tax.

If you have unearned income, such as investment income, of more than $2,700 (for 2025), and you are not filing a joint return, then your unearned income over $2,700 is taxed at your parents' rate if any one of the following is true.

(1) You were under 18 at the end of 2025.

(2) You were 18 at the end of 2025 and your earned income (from working) is not more than half of your total support for the year.

(3) You were under 24 at the end of 2025, you were a full-time student, and your earned income (from working) is not more than half of your total support for the year.

Note that it makes no difference whether or not you can be claimed as a dependent.

[Mike9241]

There is confusing information. "I am a college student filing single with someone can claim me". If you can be claimed as a dependent by anyone, it must be indicated on your return. even if they don't actually claim you. However, I have my doubts about anyone other than your parents being able to claim you and perhaps they can't either. To be a

Qualifying Relative and being eligible to be claimed as a dependent by that OP if all these rules are met:

• you lived in their household the entire year (temporary absences are ignored) or are related by blood or marriage.
• your gross income for 2025 is less than $5200 (this includes earned and unearned income) 
• they provided over ½ of your support. This seems doubtful since you say you paid for your schooling and living expenses 
• you aren't a qualifying child of another taxpayer. This is not possible if you are providing over 50% of your support 
• you can’t claim any  dependents
• you must be a US citizen, resident alien or national or a resident of Canada or Mexico

You cannot be a qualifying child of your parents if you (not the OP) are providing over 50% of your support. This seems likely if you (not the op) are paying your living expenses and tuition

however the kiddie tax would apply if you are not over 23 but

1. you are under 18 always applies

2. you are 18 and your earned income is less than or equal to 50% of your support

3) you are 19-23 and a full-time student, but your earned income is less than or equal to 50% of your support 

tax credits could be wiping out the kiddie tax

The amount you owe, if any, is on line 37 of the 1040