IRS Form 8814, titled "Parent's Election to Report Child's Interest and Dividends," allows parents to report their child’s investment income (specifically interest and dividends) on their own tax return instead of filing a separate return for the child.
When Can You Use Form 8814?
You can elect to use this form if all of the following conditions are met:
- The child is under age 19, or under age 24 if a full-time student.
- The child’s only income is from interest and dividends.
- The child’s gross income is less than $13,500 for the tax year.
- The child does not file a joint return.
- The child is claimed as a dependent on your return.
Why use it?
Filing Form 8814 can simplify tax filing by avoiding the need to file a separate return for the child. However, it may result in a higher tax liability because part of the child’s income may be taxed at the parent’s higher rate (this is part of the “kiddie tax” rules).
What Does It Report?
- Interest income
- Dividend income, including capital gain distributions
⚠️ Important Notes:
- If the child has any other type of income (like wages), this form cannot be used.
- The parent must include the child’s income on their Form 1040 and attach Form 8814.
Program Entry:
Form 8814 is located under Other Taxes - Parents' Election to Report Child's Interest and Dividends
You can find the official form and instructions on the IRS website here.