Kiddie tax not required but final review keeps flagging errors

[LTrinh]

My child unearned income is much less than $2700.  So I deleted the form 8615.  The federal review (and smart check) keep flagging missing parent income information.  Is this a bug in Turbo Tax software?

I think the State (CA) review also flags these as missing info.

PS: Turbo should know my child unearned income is much less than $2700.  The step-by-step should bypass filling the form 8615.

[RachelW33]

You are correct, Form 8615 (Kiddie Tax) should not be generating if your child's unearned income is less than $2,700.

I recommend deleting any unearned income forms (i.e. 1099-INT, 1099-DIV) that have been entered for your daughter and then re-entering them.  Revisit those sections, select the trash can icon to delete, and then enter again.

Also, if there aren't many forms to input for your daughter, you may consider clearing and starting over.  Please see: How do I clear and start over?

[LTrinh]

The link you provided on "how to clear and start over" was for filing online.  I bought the desktop premier version.

I tried to delete the form 8615, it was deleted and came back immediately as if the deletion was not finished.  The same happened when I tried to delete the 8615 worksheet.

I have been using Turbo Tax since 1997 without any issue until now.  First the form 1099-Q does not allow me to leave box 2 nad 3 blank (these were allowed in previous years) and now deleting forms would not work.  I am disappointed as this year product seems immaturely released.  Will these problems be fixed any time soone?

[LTrinh]

I removed all 1099-INT and 1099-DIV and re-entered them.  During the smart check, errors are flagged and sure enough the errors were missing information for form 8615.

My daughter is a full time student, so I claim her as dependent.  As little as she made, form 8615 keeps popping up and prevents me to continue is quite frustrating.

Please help

[AmyC]

The program feels sure you need the form when it comes back after deletion. There is something triggering it to hold. 

The kiddie tax includes scholarship income above education expenses. Many students trigger the kiddie tax. Since you are in the desktop version, switch over to Forms mode. The red exclamation on 8615 tells you there is an issue. There should be some pink boxes wanting information. For some lines, you can right click to see a data source.

Which lines are giving you trouble and what are all the sources of student income and amounts from each?

Reference: What is the Kiddie Tax?

[LTrinh]

"Which lines are giving you trouble and what are all the sources of student income and amounts from each?"

Currently the parents info are missing.  If I fill the parent info, as I have tried before, the parent filing status and income will be asked and my daughter's tax will be much higher.  I don't think these are needed if from 8615 is not needed.  So the question is what keeps triggering form 8615 to be filled?

Some background: My daughter is a full time college student,

Earned income is less than $14k, unearned income (1099-DIV) is around $300.  I also skip filling 1099-Q since all distribution money was used for school and Turbo Tax does not allow box 2  (Earnings) and 3 (Basis) to be empty.  I include my daughter as dependent.

[DaveF1006]

It depends. @AmyC  mentions the possible reason is that any scholarship or grant money (Box 5 of Form 1098-T) that exceeds the amount of tuition (Box 1) is considered taxable unearned income.  If you entered a 1098-T where Box 5 is even $1 higher than Box 1, TurboTax automatically flags that excess as unearned income. If that excess plus her dividends totals more than $2700, Form 8615 is generated. This is a common "gotcha" that many people do not realize.

Review the 1098-T entry. If she used that "excess" scholarship money for required books, equipment, or supplies, you can enter those expenses to reduce the taxable scholarship amount. If the taxable scholarship amount drops, Form 8615 may disappear. 

If Form 8615 is required because of the scholarship income, you can go to the forms mode on your return. Locate Form  8615 then enter the parent information, SSN, and filing status in Boxes A-C at the top of the form. Be sure to place a checkmark stating your child meets all the qualifications listed for the form. 

Also, check your forms. If there is a 1099Q or worksheets associated with it, delete these.

[ Edited 02/25/2026 I 12:17pm PST]

[LTrinh]

My daugher does not receive any scholarship.  There is no 1099-T form either.

I restarted her filing on TurboTax from scratch, so I treated 1099-Q as non-existent (per previous suggestion from Turbo Tax online explert.  The result is the same, the final review keeps flagging errors.

As I mentioned before, her earned income (part time job), and unearned income (from bank) are very small and those are all incomes she has.  No scholarship, no pell grant, no student loan, etc.... no other income

Please try the desktop version and see the error yourself.  I hope this will be fixed soon,  I want to finish the taxes.  Thanks

[LTrinh]

I think I found the issue.  The unearned income is actually over $2700.  From the step-step process, I did not see the "total capital gain distribution", I only see the investment interest (1099-INT) and investment divident (1099-DIV).  With the addition of the"total capital gain distribution", the unearned income is just over $2700.