Your mom does not have to file a tax return. If she doesn't have taxable income, enter 0 when you are asked. When filing the form, you must provide the child's name and Social Security Number (SSN) and the name and Social Security Number of a parent, as well as which filing status the parent is using, such as single, joint or married filing separately. The form has three parts:
- Part I identifies the child's unearned income and how much of it is subject to the kiddie tax
- Part II calculates the kiddie tax
Typically, children are placed in a lower tax bracket than their parents and the reason for this is quite simple: most children don't have that much income, and those that do, rarely earn more than their parents. Some parents have attempted to take advantage of this by putting investments in their children's names, hoping that any investment profits would be taxed at the child's lower rate. In response, the federal government changed the tax treatment of children's unearned income by taxing it at the parent's tax rate. Form 8615 is used to make the child's tax calculations for this income. What is IRS Form 8615: Tax for Certain Children Who Have Unearned Income
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. Anything above $2,200, however, is taxed at the rate that applies to trusts and estates, which usually is higher than the child's rate. This tax treatment has gained a nickname: the "kiddie tax." Calculating how much tax applies to the child's income is the purpose of Form 8615.
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