UTMA 1099-DIV for 18 years old

[kim_hung_lo]

My daughter has turned 18 last December. What should I do with her Form 1099-DIV from the UTMA account? It does have a very small amount of dividend. So, I am wondering whether I should put the dividend in my tax return or her tax return. (Note that she had some small amount of earned income last year. I believe that she need to file her tax return.)  Please advise on what to do with the 1099-DIV from the UTMA account.

[LeticiaF1]

It depends on what the legal age in your state is, the UTMA allows minors to receive gifts and own the account but can't control it until they become of legal age in the state in which they live (18 or 21 years of age).  If your state's legal age is 18, she could include her 1099-DIV on her return.  

[Edited 3/18/24 | 6:39AM PST ]

[kim_hung_lo]

Thanks. I checked that the age of majority for the UTMA purpose is 21. However, the 1099-DIV has my daughter's ssn on it. So, I am quite confused. In addition, I am not sure whether the reporting the dividends from an UTMA account is different from those from other accounts. She only has around $300 dividend from this UTMA account. Should this be entered in the same place in TurboTax as other dividends or in a different place?  

[LeticiaF1]

With UTMA/UGMA accounts, the income always belongs to the child (and is reported in their SSN), regardless of their age. They always "own" the account, they just can't control it until the age of majority.  If she will need to file a return for her other earned income, you could include that 1099-DIV on her tax return. See this TurboTax help article about Kiddie Tax.  

[kim_hung_lo]

Thanks.  This is helpful. 

So, let me check my understanding. My daughter is only 18 years old. But she had some earned income and so she needs to file her tax return. She also had some unearned income (about $300 dividend) from the UTMA account. The age of majority in my state is 21. So, with all these, The dividend income from her UTMA account would be reported in my tax return as Kiddie Tax, not in her tax return. 

Is my understanding correct?  

[AmyC]

If your child has earned income and needs to file a tax return, the DIV will go on her return. 

The kiddie tax will not affect your return at $300 income since it is below the threshold of $2500.

If your child did not make enough to file a tax return, she is exempt from the kiddie tax. If her earned income plus $400 is grater than $13,850, she needs to file a return. She can file a return to claim a refund if the amount earned is less.

The IRS has a quick quiz, Do I Need to File a Tax Return? that can verify what you need to do. Be sure to indicate her unearned income from the dividends.

[kim_hung_lo]

Thanks. Now, I understand this a little better. She made very little last year. So, she can file the tax return to get a refund. The DIV will not impact the federal tax as it is just too small. So, now, my question is whether the dividend from the UTMA account should be entered at the same place as any other dividends or there is a particular place for UTMA.

I am living in Pennsylvania. So, another related question is whether, for the state tax purpose, is this dividend from the UTMA account counted the same as other dividends?

Sorry.  I am very slow in this matter.

[SusanY1]

The dividends should be entered in the same place as any other dividends on your daughter's return.