Reporting savings bond interest annually for a child

[Gerald222]

My child is planning to file a federal return only to report savings bond interest.  My understanding is that he needs to file the first year and then not in subsequent years only to report this interest.  My state says he must also file a state return if he files a federal return - is this necessary as there is no savings bond interest income for state purposes?

[Vanessa A]

Clarification...Which state?

[Hal_Al]

You said " My state says he must also file a state return if he files a federal return"

That sounds like they have already contacted you, instructing you to file a state return.  Try calling the phone number on the notice for an answer directly from the state.

As others have indicated, the rules vary by state.  But, in general, there's an income threshold based on the federal filing, and there's unlikely to be an exception for US government interest.

Filing Requirements, by state: https://ttlc.intuit.com/questions/2903200-do-i-need-to-file-a-state-return

[Gerald222]

Georgia

[PattiF]

The state of Georgia filing requirements include that if a Federal return is filed then a state return has to be filed also.

You could call or email and ask about this question before filing a return. 

Taxpayer Services Directory

You can access your information 24/7 via the Georgia Tax Center 
Call Center hours are 8:00 am - 5:00 pm
Question? Email the Department with a tax question

Contact

Questions Concerning

Individual Income Tax

Refunds, Correspondence, amended returns, etc. for individual income tax.  

877-423-6711  

 @Gerald222 

[Gerald222]

Also, for reporting annual interest on the federal tax forms, the instructions indicate to state on the return that your child chooses to report the interest each year.  Where should this statement be written and on which form?

[RobertB4444]

This will be on an attached statement that you will provide and attach to the return.  This will require that you mail the return in as TurboTax does not provide the ability to attach that statement.

@Gerald222 

[remiliu]

I'm not sure if I am in the same situation.  I want to report my child's savings bond interest yearly.  They have no other income and is my dependent.  However the interest gained in the year is < $1,000.  So do I need to file a tax return for my daughter in order to report yearly or is it not necessary because it is under the threshold for needing to file taxes?  The reason why I want to report the interest yearly is so that taxes will not have to be paid on it yearly but if I wait 5 years for maturity, it will be over the limit for interest gained and be taxable.

Thanks in advance for any help

[DaveF1006]

I  would still wait until the bond matures. It's not recommended to report the interest when it is not required on the return.

[Hal_Al]

I don't know for sure, but I would think a return would have to be filed to be consider "reported".

 If his only income is from interest (including savings bonds) and dividends, Alaska PFD or capital gains distributions shown on a 1099-DIV, there is a provision for entering it on your return, using form 8814. Enter at Less common income / Child's income.

[remiliu]

If I wait for the bond to mature, then I will have to pay all 5 years worth of interest that final year.  If I report every year, then the taxable interest is below the yearly threshold and will not have to pay taxes.

Why is it not recommended to report taxes yearly.  It clearly states that I can report them yearly or wait until it matures and I get a 1099-INT

[DianeW777]

It is completely up to you how you want to file the savings bond interest.  The returns need to be filed to account for the reporting of the interest each year so that you have proof the interest was reported each year when the bond matures.

The general theory of taxation is keep what you can this year and let next year take care of itself.  In your case you are thinking of future tax consequences and that's a good idea.

@remiliu