Why must Form 8615: Line 6 be entered?

[rjs]

From 8615 is for the "kiddie tax," which calculates the tax on your investment income over $2,100 at your parent's tax rate. Obviously, in order to calculate the tax at your parent's rate, information from your parent's tax return is needed. Line 6 of Form 8615 is the taxable income from your parent's tax return.

It sounds like you are getting this error when TurboTax is checking your return for errors. You may have skipped the Child's Income topic in the TurboTax interview. If so, the error check is going to ask for all the information that you should have entered in the interview, one item at a time. You should go back to the Child's Income topic and go through the questions and answers. Here's how to get to that topic.

• Click the Federal Taxes tab.
  
• Click Wages & Income.
  
• Click "I'll choose what I work on" or "Jump to a full list."
  
• On the screen "Your 2016 Income Summary," scroll all the way down to the bottom, to the "Less Common Income" section.
  
• Under "Less Common Income," click the Start, Update, or Revisit button for "Child's Income (Under Age 24)."

The tax at your parent's rate is commonly called "kiddie tax" from the days when it only applied to children under 14. The age limit has been raised to where it can apply to adult children who are still in school, but the name has stuck.

You are subject to the kiddie tax if you have investment income (unearned income) of more than $2,100, you are not filing a joint return, and any one of the following is true.

1. You were under 18 at the end of 2016.
   
2. You were 18 at the end of 2016 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 2016, you were a full-time student, and your earned income (from working) is not more than half of your total support for the year.

[thale828]

Do i need my parent tax return from 2020 or 2019?

[rjs]

@thale828  If you are subject to kiddie tax on your 2020 tax return, you need the information from your parents' 2020 tax return.

[benafrank]

What if parent is not filing?

[MaryM428]

If the parents are not filing then the child will file their own return.  

They will need information from the parents to file their return, even if the parent(s)
do not file.
 

If the parents will not supply that information, then you'll have to reach out to the IRS to get this information.
 

According to Parent's return information not available in the IRS's 2020 Publication 929, Tax Rules for Children and Dependents (draft), 

If a child can’t get the required information about his or her parent's tax return, the child (or the child's legal representative) can request the necessary information from the Internal Revenue Service (IRS). 

A procedure in the document describes the steps you should take to request this information.

[hbl3973]

benafrank,

The instructions (https://www.irs.gov/pub/irs-pdf/i8615.pdf) for form 8615 state:

Incomplete Information for Filing
If the parent's taxable income, filing status, or net unearned income
of the parent's other children isn't known by the due date of the
child’s return, reasonable estimates can be used. Enter “Estimated”
next to the appropriate line(s) of Form 8615. When the correct
information is available, file Form 1040-X, Amended U.S. Individual
Income Tax Return.
Instead of using estimates, the child can get an automatic
6-month extension of time to file. For details, see Form 4868,
Application for Automatic Extension of Time To File U.S. Individual
Income Tax Return

[rjs]

The TurboTax interview does not allow the use of estimates for the parents' information on Form 8615. The only way to indicate that estimates are being used is to check the appropriate box(es) in forms mode in the CD/Download TurboTax software. Since TurboTax Online does not have forms mode, there is no way to use estimates in TurboTax Online.

[WY6]

@MaryM428  - could you double check the Turbo Tax calculation on line 15 of Form 8615 ?  It looks to me like Line 15 is calculating incorrectly. It looks to me like it is calculating the tax based on the amount on Line 4 instead of Line14 - can you have TurboTax fix this ?  There were a lot of kids collecting unemployment during the pandemic - this is kind of a big deal 

[JamesG1]

What problems are you seeing?  Please clarify.  We are not able to see your tax return.

Unemployment compensation is considered unearned income for purposes of IRS Form 8615.

IRS Form Instructions for Form 8615 states:

Unearned Income For Form 8615, “unearned income” includes all taxable income other than earned income.

Unearned income includes taxable interest, ordinary dividends, capital gains (including capital gain distributions), rents, royalties, etc. It also includes taxable social security benefits, pension and annuity income, taxable scholarship and fellowship grants not reported on Form W-2, unemployment compensation, alimony, and income (other than earned income) received as the beneficiary of a trust.

[WY6]

@JamesG1 JamesG1

There is an calculation error on Form 8615 for TurboTax Deluxe for Windows

A red flag was raised in my head when I saw that my child's tax liability is 24 % tax on Unemployment Income when my highest tax bracket is 12%

I see that there is an error in the calculation on Line 15 - the number on Line 15 should be the tax on the Amount on Line 14 - Instead, it is calculating the tax on Line 4

[rjs]

@WY6  You didn't give us enough details about your own tax return to exactly reproduce your problem. But I think you are running into a known bug in the calculations on Form 8615. TurboTax is working on the problem. In the meantime, here is a way that you might be able to work around the bug and get a correct result.

Do you have any qualified dividends on your own tax return? If not, go through the Child's Income interview again in the child's tax return, and enter $1 in "Parent's Qualified Dividends." When you press Tab or click Continue you should see the tax amount change. Go back and delete the qualified dividends that you entered, or change it to zero. Then proceed through the rest of the Child's Income interview until you get back to the income summary screen. Does Form 8615 look correct now?

If you need further help, please tell us whether you are using TurboTax Online or the CD/Download TurboTax software, and what edition (Deluxe, Premier, etc.).

[WY6]

@rjs  note to TurboTax --  If this is a known issue, why aren't you letting people know about this?  I am a registered user - you have my email address - couldn't you send out an email at the very least to your registered users with a list of "known bugs" ? 

You send me emails about Rewards & Stickers that I could care less about. 

I am concerned about all the users who are not aware of this glitch and will pay the IRS money they don't need to .  People trust TurboTax to be accurate.

[AkinaLO]

From this public forum, we don't have access to an e-mail list to automatically e-mail customers for program issues, but we do try to respond to user questions as they arise. If you wish to be notified of program issues, please contact customer support.

What is the TurboTax phone number?

[thale828]

What if she hasn't done her tax return yet? Or wont do it? How can I do mine without her?