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<\/a>Some children receive investment income and are required to file a federal tax return. If a child cannot file his or her own tax return for any reason, such as age, the child’s parent or guardian is responsible for filing a return on the child\u2019s behalf.<\/p>\n
There are special tax rules that affect how parents report a child\u2019s investment income. Some parents can include their child\u2019s investment income on their tax return. Other children may have to file their own tax return.<\/p>\n
Here are four facts from the IRS about the taxability of your child\u2019s investment income.<\/p>\n
1. \u00a0Investment income normally includes interest, dividends, capital gains and other unearned income, such as from a trust.<\/p>\n
2.\u00a0 Special rules apply if your child’s total investment income is more than $1,900. The parent\u2019s tax rate may apply to part of that income instead of the child’s tax rate.<\/p>\n
3.\u00a0 If your child’s total interest and dividend income is less than $9,500, you may be able to include the income on parent\u2019s tax return. See Form 8814, Parents’ Election to Report Child’s Interest and Dividends. If parent\u2019s make this choice, the child does not file a return.<\/p>\n
4.\u00a0 Your child must file their own tax return if they received investment income of $9,500 or more. File Form 8615, Tax for Certain Children Who Have Investment Income of More Than $1,900, with the child\u2019s federal tax return.<\/p>\n