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How to enter Form 8615 - Tax for Certain Children Who Have Unearned Income on a tax return

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Purpose of Form

For children under age 18 and certain older children, unearned income over $2,200 is taxed at the parent's rate if the parent's rate is higher than the child's.  If the child's unearned income is more than $2,200, use Form 8615 to figure the child's tax.

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.

Who Must File

Form 8615 must be filed for any child who meets all of the following conditions.

  1. The child had more than $2,200 of unearned income.

  2. The child is required to file a tax return.

    1. Was under age 18 at the end of 2020,

    2. Was age 18 at the end of 2020 and didn’t have earned income that was more than half of the child's support, or

    3. Was a full-time student at least age 19 and under age 24 at the end of the tax year and didn’t have earned income that was more than half of the child's support.

  4. At least one of the child's parents was alive at the end of they tax year.

  5. The child doesn’t file a joint return.

For these rules, the term “child” includes a legally adopted child and a stepchild. These rules apply whether or not the child is a dependent. These rules don’t apply if neither of the child’s parents were living at the end of the year.

 

Support. Your support includes all amounts spent to provide the child with food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. To figure your child’s support, count support provided by you, your child, and others. However, a scholarship received by your child isn’t considered support if your child is a full-time student.

 

You may get this verify message when completing a tax return that may require Form 8615

 

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Follow the instructions below to complete Form 8615:

1. Click Add Form from the toolbar (Ctrl + A for the shortcut)

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2. Search for FRM 8615 - Tax for Certain Children Who Have Unearned Income and double-click to add form to tax return.

 

 

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3.  Complete the following information before continuing to Part I or Par II:

  1. Parent's Name
  2. Parent's SSN
  3. Parent's filing status

 

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4. Complete Part I by adding any additional investment income, if any.

 

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5. Complete Part II by entering the following:

  1. Complete line 6 by entering the Parent's taxable income from Form 1040 line 15 (parent's return)
  2. Complete line 7 by entering total from Forms 8615, line 5, for all of the parent's other children
  3. Complete line 10 by entering the parent's tax from Form 1040, line 16

Child's tax will calculate in Part III depending on the above information.

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IF THE CHILD/TAXPAYER IS NOT REQUIRED TO USE FORM 8615 TO CALCULATE THEIR TAX, MARK THE BOX BELOW ON THE FORM 1040.

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