Kiddie Tax Reporting

How is the kiddie tax reported on a tax return?

For federal income tax returns, there are two possible ways to report and pay the kiddie tax. (State reporting will vary by state.)

1. Child's Return: The kiddie tax computation is generally done on IRS Form 8615, which must be attached to the child's tax return.

   
   

2. Parents' Return: The parents may elect to report the child's income on their own return using IRS Form 8814 if these conditions are met.

   
   

   1. The child's only income is from interest or dividends (including mutual fund capital gain distributions).

      
      

   2. Total interest and dividends are over $800 but less than $8,000 (same for 2004).

      
      

   3. No estimated tax payments were made for the child.

      
      

   4. The child is not subject to backup withholding.

      
      

   5. Child is under age 14.

Note: If the child is reporting, any capital gains and losses where the proceeds exceed $800 (other than mutual fund capital gain distributions) the child must file his or her own return.