How to File Form 8615 for the Kiddie Tax

Form 8615, “Tax for Certain Children Who Have Unearned Income,” is an Internal Revenue Service (IRS) document used to calculate tax on a child’s investment income. Commonly referred to as the “kiddie tax,” these regulations were established to discourage parents from sheltering their own investment income from higher taxes by placing assets in their children’s names. The form ensures that a child’s significant unearned income, above a certain threshold, is taxed at their parents’ marginal tax rate rather than the child’s lower rate.

This tax applies specifically to unearned income, which includes things like interest, dividends, and capital gains, as opposed to earned income from a job. The core function of Form 8615 is to determine the amount of tax owed on this unearned income by applying the appropriate parental tax rate. It is filed with the child’s own tax return, such as Form 1040, and is a separate calculation from the parents’ tax liability.

Determining if Form 8615 is Required

A child is required to file Form 8615 if they meet a series of specific conditions set by the IRS. The rules for the kiddie tax are triggered by how unearned income is taxed. For 2025, the first $1,350 of unearned income is not taxed, the next $1,350 is taxed at the child’s income tax rate, and any unearned income over $2,700 is subject to the kiddie tax at the parent’s rate, which requires filing Form 8615.

Beyond the income threshold, age-based tests must be met. The rules apply if the child was under age 18 at the end of the tax year. The requirements also extend to a child who was age 18 at the end of the year if their earned income did not constitute more than half of their own support. Similarly, a full-time student between the ages of 19 and 23 must file if their earned income was not more than half of their support.

Several other conditions must also be satisfied. The child must be required to file a tax return for the year and cannot file a joint return with a spouse. Additionally, at least one of the child’s parents must have been alive at the end of the tax year. These rules apply whether or not the child is claimed as a dependent.

Information Needed to Complete Form 8615

Before filling out Form 8615, specific information for both the child and the parent must be gathered. For the child, you will need their full name, Social Security Number (SSN), their total taxable income from their Form 1040, and their total unearned income.

You will also need the parent’s information, including their name, SSN, and filing status. The parent’s taxable income is a figure taken directly from their own Form 1040. If the parents are married but file separate returns, the return of the parent with the higher taxable income is used. If the parents are divorced, the custodial parent’s information is used.

Finally, you must have the total tax liability from the parent’s completed tax return. It is also necessary to know the amounts of any net capital gains and qualified dividends for both the parent and the child, as these are handled separately in the calculation.

Calculating the Tax on Form 8615

The first part of the form establishes the child’s net unearned income, which is the amount subject to the kiddie tax. This is found by taking the child’s total unearned income and subtracting the 2025 threshold of $2,700. The form then compares this result to the child’s total taxable income, and the smaller of the two figures is used for the rest of the calculation.

The next step calculates a tentative tax at the parent’s rate. This involves adding the child’s net unearned income to the parent’s taxable income. A hypothetical tax is then calculated on this new total using the parent’s filing status. From this hypothetical tax, the parent’s actual tax is subtracted, and the difference represents the allocable parental tax.

The form then determines the tax on the portion of the child’s income that is not subject to the parent’s rate. This is done by subtracting the net unearned income from the child’s total taxable income. The tax on this remaining amount is calculated using the child’s own tax bracket.

The final step combines the two tax amounts. The allocable parental tax is added to the tax calculated at the child’s rate. This sum is the child’s total tax liability for the year and is transferred from Form 8615 to the child’s Form 1040 tax return.

Parent’s Election to Report Child’s Income

As an alternative to the child filing Form 8615, parents may be able to report the child’s income on their own tax return. This is done by filing Form 8814, Parent’s Election To Report Child’s Interest and Dividends. This option is available if the child is under age 19 (or under 24 if a full-time student) at the end of the tax year and other conditions are met.

The child’s only income for the year must be from interest and dividends, and for 2025, their gross income must be less than $13,500. The child must also be required to file a return if the election is not made. Additionally, the child cannot file a joint return, have made estimated tax payments, or had federal income tax withheld.

If these conditions are met, the parent can complete Form 8814 and attach it to their Form 1040. The child’s income is added to the parent’s income, and the parent pays the resulting tax, which eliminates the need for the child to file a separate return. A separate Form 8814 must be filed for each child whose income the parent elects to report.