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If your child is under age 14 and has over 2100 of unearned income (interest, dividends, capital gains, etc.) then part of their income will be subject to the "kiddie" tax. The kiddie tax is calculated on Form 8615 if your child files his or her own tax return and is calculated on Form 8814 if you report your child's income on your own tax return.
If your child has less than 1050 in unearned income, then no tax return needs to be filed for the child and nothing need to be reported on your tax return. If your child has more than 1050 in unearned income you can either report the child's income on your tax return by using Form 8814 or you can file a separate tax return for your child and use Form 8615. If you use Form 8814, your child will not have to file a return. Form 8814 cannot be used and your child must file a tax return if (1) your child has more than 10500 of gross income, (2) made estimated tax payments, or (3) had federal income tax withheld.
Form 8814 Tax Tips
Using Form 8814 is usually more convenient than filing a tax return for your child, however, you often end up paying more overall taxes if you use Form 8814 instead of filing a tax return for your child. If you have items on your tax return that are affected by adjusted gross income such as IRA deductions and itemized deductions, then using Form 8814 and adding your child's income to your tax return could reduce your IRA deduction or itemized deductions.