Do I Have To File A Return For My Child?

A return must be filed by (or for) a dependent child, if the child has income above ANY of the following limits:

Wages (when added to self-employment income) over $4,550
Unearned income over $750
Total income over $750 includes at least $1 of unearned income
Self-employment income over $400
Sale of stock, bonds or mutual funds (whether at a gain or loss) if the gross proceeds from the sale exceed $700.

If your child has to file a return, and is being claimed as a dependent on your return, he or she cannot also claim a personal exemption on his or her personal return.

If your child is under age 14 at the end of the year, and has investment income, Form 8615 must be attached to the child's return, to determine what portion (if any) of the income is to be taxed at the parent's marginal rate.

Under certain circumstances, you can forego filing a separate return for your child, if you elect to report his or her income on your return using Form 8814. This election is available ONLY if ALL of these conditions apply:

All income is from interest or dividends only
Income does not exceed $5,000
No estimated tax payments have been made in the child's name
No taxes were withheld from the income
If the child is under 14 at year end, you are the parent referred to in the instructions for Form 8615.

Note: Under most circumstances, we do NOT recommend that this Form 8814 election be made. It will generally result in a higher portion of your child's income being subject to tax, will increase your AGI (which limits some of your deductions), could increase or cause an underpayment penalty, and could make an even more dramatic difference on your state income tax return.

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Disclaimer
We do not offer legal advice. All information provided on this website is for informational purposes only and is not a substitute for proper legal advice. If you have legal questions, we recommend that you seek the advice of legal professionals.

Tax Disclaimer: To ensure compliance with IRS Rules, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.