skip navigation

Search Help
Navigation Help

Tax Map Index
ABCDEFGHI
JKLMNOPQR
STUVWXYZ#

International
Tax Topic Index

Affordable Care Act
Tax Topic Index

FAQs
Forms
Publications
Tax Topics

Comments
About Tax Map

IRS.gov Website
Publication 929
taxmap/pubs/p929-009.htm#en_us_publink1000203825

Tax for Certain Children Who Have Unearned Income(p12)

rule
If a child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. If the parent does not or cannot choose to include the child's income on the parent's return, use Form 8615 to figure the child's tax. Attach the completed form to the child's Form 1040, Form 1040A, or Form 1040NR.
taxmap/pubs/p929-009.htm#en_us_publink1000203826

When Form 8615 must be filed.(p12)

rule
Form 8615 must be filed for a child if all of the following statements are true.
  1. The child's unearned income was more than $2,000.
  2. The child is required to file a return for 2013.
  3. The child either:
    1. Was under age 18 at the end of the year,
    2. Was age 18 at the end of the year and did not have earned income that was more than half of his or her support, or
    3. Was over age 18 and under age 24 at the end of the year, was a full-time student, and did not have earned income that was more than half of his or her support.
  4. At least one of the child's parents was alive at the end of 2013.
  5. The child does not file a joint return for 2013.
These conditions are also shown in Figure 2.
taxmap/pubs/p929-009.htm#en_us_publink1000203827

Certain January 1 birthdays.(p13)

rule
Use the following chart to determine whether certain children with January 1 birthdays meet condition 3 under When Form 8615 must be filed.
IF a child was born on...THEN, at the end of 2013, the child is considered to be...
January 1, 199618*
January 1, 199519**
January 1, 199024***
*This child is not under age 18. The child meets condition 3 only if the child did not have earned income that was more than half of the child's support.
**This child meets condition 3 only if the child was a full-time student who did not have earned income that was more than half of the child's support.
***Do not use Form 8615 for this child.
taxmap/pubs/p929-009.htm#en_us_publink1000266275

Figure 2. Do You Have To Use Form 8615 To Figure Your Child's Tax?

taxmap/pubs/p929-009.htm#en_us_publink1000266271
taxmap/pubs/p929-009.htm#en_us_publink1000203829

Providing Parental Information
(Form 8615, Lines A–C)(p14)

rule
On Form 8615, lines A and B, enter the parent's name and social security number. (If the parents filed a joint return, enter the name and social security number listed first on the joint return.) On line C, check the box for the parent's filing status.
See Which Parent's Return To Use, earlier, for information on which parent's return information must be used on Form 8615.
taxmap/pubs/p929-009.htm#en_us_publink1000203830

Parent with different tax year.(p14)

rule
If the parent and the child do not have the same tax year, complete Form 8615 using the information on the parent's return for the tax year that ends in the child's tax year.
taxmap/pubs/p929-009.htm#en_us_publink1000203831

Example.(p14)

Kimberly must use her mother's tax and taxable income to complete her Form 8615 for calendar year 2013 (January 1 – December 31). Kimberly's mother files her tax return on a fiscal year basis (July 1 – June 30). Kimberly must use the information on her mother's return for the tax year ending June 30, 2013, to complete her 2013 Form 8615.
taxmap/pubs/p929-009.htm#en_us_publink1000203832

Parent's return information not known timely.(p14)

rule
If the information needed from the parent's return is not known by the time the child's return is due (usually April 15), you can file the return using estimates.
You can use any reasonable estimate. This includes using information from last year's return. If you use an estimated amount on Form 8615, enter "Estimated" on the line next to the amount.
When you get the correct information, file an amended return on Form 1040X, Amended U.S. Individual Income Tax Return.
taxmap/pubs/p929-009.htm#en_us_publink1000203833
Extension of time to file.(p14)
Instead of using estimates, you can get an automatic 6-month extension of time to file if, by the date your return is due, you file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. See the instructions for Form 4868 for details.
EIC
An extension of time to file is not an extension of time to pay. You must make an accurate estimate of the tax for 2013. If you do not pay the full amount due by the regular due date, the child will owe interest and may also be charged penalties. See Form 4868 and its instructions.
taxmap/pubs/p929-009.htm#en_us_publink1000203835

Parent's return information not available.(p14)

rule
If a child cannot get the required information about his or her parent's tax return, the child (or the child's legal representative) can request the necessary information from the Internal Revenue Service (IRS).
taxmap/pubs/p929-009.htm#en_us_publink1000203836
How to request.(p14)
After the end of the tax year, send a signed, written request for the information to the Internal Revenue Service Center where the parent's return will be filed. (The IRS cannot process a request received before the end of the tax year.)
Tax Tip
You should also consider getting an extension of time to file the child's return, because there may be a delay in getting the requested information.
The request must contain all of the following.
A child's legal representative making the request should include a copy of his or her Power of Attorney, such as Form 2848, or proof of legal guardianship.
taxmap/pubs/p929-009.htm#en_us_publink1000203840

Step 1. Figuring the Child's Net Unearned Income
(Form 8615, Part I)(p14)

rule
The first step in figuring a child's tax using Form 8615 is to figure the child's net unearned income. To do that, use Form 8615, Part I.
taxmap/pubs/p929-009.htm#en_us_publink1000203841

Line 1 (Unearned Income)(p14)

rule
If the child had no earned income, enter on this line the adjusted gross income shown on the child's return. Adjusted gross income is shown on Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37. Form 1040EZ and Form 1040NR-EZ cannot be used if Form 8615 must be filed.
If the child had earned income, figure the amount to enter on Form 8615, line 1, by using the worksheet in the instructions for the form.
Tax Tip
However, use the following worksheet if:
  • the child has excluded any foreign earned income,
  • deducted a loss from self-employment, or
  • has a net operating loss from another year.
Alternate Worksheet
for Form 8615, Line 1
A.Enter the amount from the child's Form 1040, line 22, or Form 1040NR, line 23
B.Enter the total of any net loss
from self-employment, any net operating loss deduction, any foreign earned income exclusion, and any foreign housing exclusion from the child's Form 1040 or Form 1040NR. Enter this total as a positive number (greater than zero)
C.Add line A and line B and
enter the total
D.Enter the child's earned income plus any amount from the child's Form 1040, line 30, or the child's Form 1040NR, line 30
 Generally, the child's earned income is the total of the amounts reported on Form 1040, lines 7, 12, and 18 (if line 12 or 18 is a loss, use zero) or Form 1040NR, lines 8, 13, and 19 (if line 13 or 19 is a loss, use zero)  
E.Subtract line D from line C. Enter the result here and on Form 8615, line 1
taxmap/pubs/p929-009.htm#en_us_publink1000203846

Unearned income defined.(p15)

rule
Unearned income is generally all income other than salaries, wages, and other amounts received as pay for work actually performed. It includes taxable interest, dividends, capital gains (including capital gain distributions), the taxable part of social security and pension payments, certain distributions from trusts, and unemployment compensation. Unearned income includes amounts produced by assets the child obtained with earned income (such as interest on a savings account into which the child deposited wages).
taxmap/pubs/p929-009.htm#en_us_publink1000203847
Nontaxable income.(p15)
For this purpose, unearned income includes only amounts the child must include in gross income. Nontaxable unearned income, such as tax-exempt interest and the nontaxable part of social security and pension payments, is not included.
taxmap/pubs/p929-009.htm#en_us_publink1000203848
Capital loss.(p15)
A child's capital losses are taken into account in figuring the child's unearned income. Capital losses are first applied against capital gains. If the capital losses are more than the capital gains, the difference (up to $3,000) is subtracted from the child's interest, dividends, and other unearned income. Any difference over $3,000 is carried to the next year.
taxmap/pubs/p929-009.htm#en_us_publink1000203849
Income from property received as a gift.(p15)
A child's unearned income includes all income produced by property belonging to the child. This is true even if the property was transferred to the child, regardless of when the property was transferred or purchased or who transferred it.
A child's unearned income includes income produced by property given as a gift to the child. This includes gifts to the child from grandparents or any other person and gifts made under the Uniform Gift to Minors Act.
taxmap/pubs/p929-009.htm#en_us_publink1000203850

Example.(p15)

Amanda Black, age 13, received the following income. The dividends were qualified dividends on stock given to her by her grandparents.
Amanda's unearned income is $2,100. This is the total of the dividends ($800), taxable interest ($1,200), and capital gains reduced by capital losses ($300 − $200 = $100). Her wages are earned (not unearned) income because they are received for work actually performed. Her tax-exempt interest is not included because it is nontaxable.
taxmap/pubs/p929-009.htm#en_us_publink1000203851
Trust income.(p15)
If a child is the beneficiary of a trust, distributions of taxable interest, dividends, capital gains, and other unearned income from the trust are unearned income to the child.
However, taxable distributions from a qualified disability trust are considered earned income for the purposes of completing Form 8615. See the Form 8615 instructions for details.
taxmap/pubs/p929-009.htm#en_us_publink1000203852
Adjustment to income.(p15)
In figuring the amount to enter on line 1, the child's unearned income is reduced by any penalty on the early withdrawal of savings.
taxmap/pubs/p929-009.htm#en_us_publink1000203853

Line 2 (Deductions)(p15)

rule
If the child does not itemize deductions on Schedule A (Form 1040 or Form 1040NR), enter $2,000 on line 2.
If the child itemizes deductions, enter on line 2 the larger of:
  1. $1,000 plus the portion of the child's itemized deductions on Schedule A (Form 1040), line 29 (or Schedule A (Form 1040NR), line 15), that are directly connected with the production of the unearned income entered on line 1, or
  2. $2,000.
taxmap/pubs/p929-009.htm#en_us_publink1000203854

Directly connected.(p15)

rule
Itemized deductions are directly connected with the production of unearned income if they are for expenses paid to produce or collect taxable income or to manage, conserve, or maintain property held for producing income. These expenses include custodian fees and service charges, service fees to collect taxable interest and dividends, and certain investment counsel fees.
These expenses are added to certain other miscellaneous itemized deductions on Schedule A (Form 1040). Only the amount greater than 2% of the child's adjusted gross income can be deducted. See Publication 529, Miscellaneous Deductions, for more information.
taxmap/pubs/p929-009.htm#en_us_publink1000203855

Example 1.(p16)

Roger, age 12, has unearned income of $8,000, no other income, no adjustments to income, and itemized deductions of $300 (net of the 2%-of-adjusted-gross-income limit) that are directly connected with his unearned income. His adjusted gross income is $8,000, which is entered on Form 1040, line 38, and on Form 8615, line 1. Roger enters $2,000 on line 2 because that is more than the total of $1,000 plus his directly-connected itemized deductions of $300.
taxmap/pubs/p929-009.htm#en_us_publink1000203856

Example 2.(p16)

Eleanor, age 8, has unearned income of $16,000 and an early withdrawal penalty of $100. She has no other income. She has itemized deductions of $1,050 (net of the 2%-of-adjusted-gross-income limit) that are directly connected with the production of her unearned income. Her adjusted gross income, entered on line 1, is $15,900 ($16,000 − $100). The amount on line 2 is $2,050. This is the larger of:
  1. $1,000 plus the $1,050 of directly connected itemized deductions, or
  2. $2,000.
taxmap/pubs/p929-009.htm#en_us_publink1000203857

Line 3(p16)

rule
Subtract line 2 from line 1 and enter the result on this line. If zero or less, do not complete the rest of the form. However, you must still attach Form 8615 to the child's tax return. Figure the tax on the child's taxable income in the normal manner.
taxmap/pubs/p929-009.htm#en_us_publink1000203858

Line 4 (Child's Taxable Income)(p16)

rule
Enter on line 4 the child's taxable income from Form 1040, line 43; Form 1040A, line 27; or Form 1040NR, line 41.
taxmap/pubs/p929-009.htm#en_us_publink1000203859

Child files Form 2555 or 2555-EZ.(p16)

rule
If the child files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, the Foreign Earned Income Tax Worksheet (in the Form 1040 instructions) is used to figure the child's tax. Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as the child's taxable income on Form 8615, line 4.
taxmap/pubs/p929-009.htm#en_us_publink1000203860

Line 5 (Net Unearned Income)(p16)

rule
A child's net unearned income cannot be more than his or her taxable income. Enter on Form 8615, line 5, the smaller of line 3 or line 4. This is the child's net unearned income.
If zero or less, do not complete the rest of the form. However, you must still attach Form 8615 to the child's tax return. Figure the tax on the child's taxable income in the normal manner.
taxmap/pubs/p929-009.htm#en_us_publink1000203863

Step 2. Figuring a Tentative Tax at the Parent's Tax Rate
(Form 8615, Part II)(p16)

rule
The next step in completing Form 8615 is to figure a tentative tax on the child's net unearned income at the parent's tax rate. The tentative tax at the parent's tax rate is the difference between the tax on the parent's taxable income figured with the child's net unearned income (plus the net unearned income of any other child whose Form 8615 includes the tax return information of that parent) and the tax figured without it.
When figuring the tentative tax at the parent's tax rate on Form 8615, do not refigure any of the exclusions, deductions, or credits on the parent's return because of the child's net unearned income. For example, do not refigure the medical expense deduction.
Figure the tentative tax on Form 8615, lines 6 through 13.
taxmap/pubs/p929-009.htm#en_us_publink1000203864

Line 6 (Parent's Taxable Income)(p16)

rule
Enter on line 6 the amount from the parent's Form 1040, line 43; Form 1040A, line 27; Form 1040EZ, line 6; Form 1040NR, line 41; or Form 1040NR-EZ, line 14. If the parent's taxable income is zero or less, enter zero on line 6.
taxmap/pubs/p929-009.htm#en_us_publink1000203865

Parent files Form 2555 or 2555-EZ.(p16)

rule
If the parent files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, the Foreign Earned Income Tax Worksheet in the Form 1040 instructions is used to figure the parent's tax. Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as the parent's taxable income, on line 6 of Form 8615.
taxmap/pubs/p929-009.htm#en_us_publink1000203866

Line 7 (Net Unearned Income of Other Children)(p16)

rule
If the tax return information of the parent is also used on any other child's Form 8615, enter on line 7 the total of the amounts from line 5 of all the other children's Forms 8615. Do not include the amount from line 5 of the Form 8615 being completed. (The term "other child" means any other child whose Form 8615 uses the tax information of the parent identified on Lines A and B of Form 8615.)
taxmap/pubs/p929-009.htm#en_us_publink1000203867

Example.(p16)

Paul and Jane Persimmon have three children, Sharon, Jerry, and Mike, who must attach Form 8615 to their tax returns. The children's net unearned income amounts on line 5 of their Forms 8615 are:
Line 7 of Sharon's Form 8615 will show $1,600, the total of the amounts on line 5 of Jerry's and Mike's Forms 8615.
Line 7 of Jerry's Form 8615 will show $1,800 ($800 + $1,000).
Line 7 of Mike's Form 8615 will show $1,400 ($800 + $600).
taxmap/pubs/p929-009.htm#en_us_publink1000203868

Other children's information not available.(p17)

rule
If the net unearned income of the other children is not available when the return is due, either file the return using estimates or get an extension of time to file. Estimates and extensions are discussed earlier under Providing Parental Information (Form 8615, Lines A–C).
taxmap/pubs/p929-009.htm#en_us_publink1000203869

Line 8 (Parent's Taxable Income Plus Children's Net Unearned Income)(p17)

rule
Enter on this line the total of lines 5, 6, and 7. You must determine the amount of net capital gain and qualified dividends included on this line before completing Form 8615, line 9.
taxmap/pubs/p929-009.htm#en_us_publink1000203870
Net capital gain.(p17)
Net capital gain is the smaller of the gain, if any, on Schedule D (Form 1040), line 15, or the gain, if any, on Schedule D, line 16. If Schedule D is not required, it is the amount on Form 1040, line 13; Form 1040A, line 10; or Form 1040NR, line 14.
taxmap/pubs/p929-009.htm#en_us_publink1000203871
Qualified dividends.(p17)
Qualified dividends are those dividends reported on line 9b of Form 1040 or Form 1040A, or line 10b of Form 1040NR.
taxmap/pubs/p929-009.htm#en_us_publink1000203872

Net capital gain and qualified dividends on line 8.(p17)

rule
If neither the child, nor the parent, nor any other child has net capital gain, the net capital gain on line 8 is zero.
If neither the child, nor the parent, nor any other child has qualified dividends, the amount of qualified dividends on line 8 is zero.
If the child, parent, or any other child has net capital gain, figure the amount of net capital gain included on line 8 by adding together the net capital gain amounts included on lines 5, 6, and 7 of Form 8615.
If the child, parent, or any other child has qualified dividends, figure the amount of qualified dividends included on line 8 by adding together the qualified dividend amounts included on lines 5, 6, and 7.
Use the instructions for Form 8615, line 8, including the appropriate Line 5 Worksheet, to find these amounts. See the instructions for Form 8615 for more details.
Note.The amount of any net capital gain or qualified dividends is not separately reported on line 8. It is
needed, however, when figuring the tax on line 9.
taxmap/pubs/p929-009.htm#en_us_publink1000203874

Line 9 (Tax on Parent's Taxable Income Plus Children's Net Unearned Income)(p17)

rule
Figure the tax on the amount on line 8 using the Tax Table, the Tax Computation Worksheet, the Qualified Dividends and Capital Gain Tax Worksheet (in the Form 1040, 1040A, or 1040NR instructions), the Schedule D Tax Worksheet (in the Schedule D instructions), or Schedule J (Form 1040), as follows.
taxmap/pubs/p929-009.htm#en_us_publink1000203875

Child files Form 2555 or 2555-EZ.(p17)

rule
If line 8 includes any net capital gain or qualified dividends and the child, or any other child filing Form 8615, also files Form 2555 or 2555-EZ, use Using the Schedule D Tax Worksheet for line 9 tax, next, to figure the line 9 tax.
taxmap/pubs/p929-009.htm#en_us_publink1000203876

Using the Schedule D Tax Worksheet for line 9 tax.(p17)

rule
Use the Schedule D Tax Worksheet (in the Schedule D instructions) to figure the line 9 tax on Form 8615 if the child, parent, or any other child has unrecaptured section 1250 gain or 28% rate gain. If you must use the Schedule D Tax Worksheet, first complete any Schedule D and any actual Schedule D Tax Worksheet required for the child, parent, or any other child. Then figure the line 9 tax using another Schedule D Tax Worksheet. (Do not attach this Schedule D Tax Worksheet to the child's return.)
Complete this Schedule D Tax Worksheet as follows.
  1. On line 1, enter the amount from Form 8615, line 8.
  2. On line 2, enter the qualified dividends included on Form 8615, line 8. (See the earlier discussion for line 8.)
  3. On line 3, enter the total of the amounts, if any, on line 4g of all Forms 4952 filed by the child, parent, or any other child.
  4. On line 4, enter the total of the amounts, if any, on line 4e of all Forms 4952 filed by the child, parent, or any other child. If applicable, include instead the smaller amount entered on the dotted line next to line 4e.
  5. On lines 5 and 6, follow the worksheet instructions.
  6. On line 7, enter the net capital gain included on Form 8615, line 8. (See the earlier discussion for line 8.)
  7. On lines 8 through 10, follow the worksheet instructions.
  8. On line 11, enter zero if neither the child, nor the parent, nor any other child has unrecaptured section 1250 gain (Schedule D, line 19) or 28% rate gain (Schedule D, line 18). Otherwise, enter the amount of unrecaptured section 1250 gain and 28% rate gain included in the net capital gain on line 8 of Form 8615. Figure these amounts as explained later under Figuring unrecaptured section 1250 gain (line 11) and Figuring 28% rate gain (line 11).
  9. If the Foreign Earned Income Tax Worksheet was used to figure the parent's tax or the tax of any child, go to step 10 below. Otherwise, skip steps 10, 11, and 12 below, and go to step 13.
  10. Determine whether there is a line 8 capital gain excess as follows.
    1. Add the amounts on line 2 of all Foreign Earned Income Tax Worksheets completed by the parent or any child for whom Form 8615 is filed. (But for each child do not add more than the excess, if any, of the amount on line 5 of the child's Form 8615 over the child's taxable income on Form 1040, line 43; Form 1040A, line 27; or Form 1040NR, line 41.)
    2. Subtract (a) from the amount on line 1 of this Schedule D Tax Worksheet.
    3. Subtract (b) from the amount on line 10 of this Schedule D Tax Worksheet. If the result is more than zero, that amount is the line 8 capital gain excess. If the result is zero or less, there is no line 8 capital gain excess.
  11. If there is no line 8 capital gain excess, skip step 12 below and go to step 13.
  12. If there is a line 8 capital gain excess, complete a second Schedule D Tax Worksheet as instructed above and in step 13, but in its entirety and with the following additional modifications. (These modifications are to be made only for purposes of filling out this additional Schedule D Tax Worksheet.)
    1. Reduce the amount you would otherwise enter on line 9 (but not below zero) by the line 8 capital gain excess.
    2. Reduce the amount you would otherwise enter on line 6 (but not below zero) by any of the line 8 capital gain excess not used in (a) above.
    3. If the child, parent, or any other child has 28% rate gain, reduce the amount you would otherwise enter on line 8 of Worksheet 1 for Line 11 of the Schedule D Tax Worksheet – 28% Rate Gain (Line 9 Tax), shown later, (but not below zero) by the line 8 capital gain excess, and refigure the amount on line 11 of this Schedule D Tax Worksheet.
    4. If the child, parent, or any other child has unrecaptured section 1250 gain, reduce the amount you would otherwise enter on line 8 of Worksheet 2 for Line 11 of the Schedule D Tax Worksheet – Unrecaptured Section 1250 Gain (Line 9 Tax) (but not below zero) by the line 8 capital gain excess not used in 12(c), and refigure the amount on line 11 of this Schedule D Tax Worksheet.
  13. Complete lines 12 through 45 following the worksheet instructions. Use the parent's filing status to complete lines 15, 42, and 44.
Enter the amount from line 45 of this Schedule D Tax Worksheet on Form 8615, line 9, and check the box on that line. Do not attach this worksheet to the child's return.
taxmap/pubs/p929-009.htm#en_us_publink1000203877
Figuring 28% rate gain (line 11).(p18)
If the child, parent, or any other child has 28% rate gain, figure the amount of 28% rate gain included in the net capital gain on Form 8615, line 8 using the following worksheet.
Worksheet 1 for Line 11 of the Schedule D
Tax Worksheet – 28% Rate Gain
(Line 9 Tax)
 1.Enter the amount, if any, from the child's Schedule D, line 18
 If line 1 is zero or blank, skip lines 2 through 4, enter -0- on line 5, and go to line 6. 
 2.Enter the amount from the last line of the child's completed Line 5 Worksheet in the instructions for Form 8615, line 8
 3.Enter the amount from line 2 of the child's completed Line 5 Worksheet
 4.Divide line 2 by line 3. Enter the result as a decimal
 5.Multiply line 1 by line 4
 6.If no other child has 28% rate gain, enter -0-. Otherwise, repeat lines 1 through 5 above for each other child who has 28% rate gain and enter the total of the line 5 amounts for those other children
 7.Enter the amount, if any, from line 18 of the parent's Schedule D
 8.Add lines 5, 6, and 7. Also include this amount on the Schedule D Tax Worksheet, line 11
taxmap/pubs/p929-009.htm#en_us_publink1000203879
Figuring unrecaptured section 1250 gain (line 11).(p18)
If the child, parent, or any other child has unrecaptured section 1250 gain, figure the amount of unrecaptured section 1250 gain included in the net capital gain on line 8 of Form 8615 using the following worksheet.
Worksheet 2 for Line 11 of the Schedule D
Tax Worksheet – Unrecaptured
Section 1250 Gain
(Line 9 Tax)
1.Enter the amount, if any, from the child's Schedule D, line 19
 If line 1 is zero or blank, skip lines 2 through 4, enter -0- on line 5, and go to line 6. 
2.Enter the amount, if any, from the last line of the child's completed Line 5 Worksheet in the instructions for Form 8615, line 8
3. Enter the amount from line 2 of the child's completed Line 5 Worksheet
4. Divide line 2 by line 3. Enter the result as a decimal
5. Multiply line 1 by line 4
6. If no other child has unrecaptured section 1250 gain, enter -0-. Otherwise, repeat lines 1 through 5 for each other child who has unrecaptured section 1250 gain and enter the total of the line 5 amounts for those children
7. Enter the amount, if any, from line 19 of the parent's Schedule D
8.Add lines 5, 6, and 7. Also include this amount on the Schedule D Tax Worksheet, line 11
taxmap/pubs/p929-009.htm#en_us_publink1000203881

Using Schedule J (Form 1040), for line 9 tax.(p19)

rule
Use Schedule J, Income Averaging for Farmers and Fishermen, to figure the line 9 tax on Form 8615 if Schedule J is used to figure the tax on the parent's return. First complete the actual Schedule J for the parent, then use another Schedule J as a worksheet to figure the tax to enter on line 9 of Form 8615. (Do not attach this worksheet to the child's return.)
Complete this worksheet Schedule J as follows.
  1. On line 1, enter the amount from Form 8615, line 8.
  2. On lines 2a, 2b, and 2c, enter the amounts from the parent's Schedule J, lines 2a, 2b, and 2c.
  3. Complete line 3 following the Schedule J instructions.
  4. Complete line 4. If Form 8615, line 8, includes any net capital gain, use the Qualified Dividends and Capital Gain Tax Worksheet to figure the tax amount on this line. For details on how to use the worksheet, see the instructions for Form 8615, line 9, but use the amount on line 3 of this worksheet Schedule J, (instead of the amount on Form 8615, line 8) in step (1) of Using the Qualified Dividends and Capital Gain Tax Worksheet for line 9 tax. However, if the child, parent, or any other child has 28% rate gain, or unrecaptured section 1250 gain, use the Schedule D Tax Worksheet. Follow the earlier instructions under Using the Schedule D Tax Worksheet for line 9 tax, except use the amount on line 3 of this worksheet Schedule J, (instead of the amount on Form 8615, line 8) in step (1).
  5. On lines 5 through 16, enter the amounts from the parent's Schedule J, lines 5 through 16.
  6. Complete lines 17 and 18 following the Schedule J instructions.
  7. On lines 19 through 22, enter the amounts from the parent's Schedule J, lines 19 through 22.
  8. Complete line 23 following the Schedule J instructions.
Enter the amount from line 23 of this worksheet Schedule J on Form 8615, line 9, and check the box on that line.
taxmap/pubs/p929-009.htm#en_us_publink1000203882

Line 10 (Parent's Tax)(p19)

rule
Enter on line 10 the amount from the parent's Form 1040, line 44; Form 1040A, line 28 (minus any alternative minimum tax); Form 1040EZ, line 10; Form 1040NR, line 42; or Form 1040NR-EZ, line 15. Do not include the tax, if any, from Form 4972 or Form 8814 or any tax from recapture of an education credit.
If the parent files Form 2555 or 2555-EZ, enter the amount from line 4 of the parent's Foreign Earned Income Tax Worksheet (in the Form 1040 instructions), instead of the parent's tax from Form 1040, line 44.
taxmap/pubs/p929-009.htm#en_us_publink1000203883

Line 11 (Tentative Tax)(p19)

rule
Subtract line 10 from line 9 and enter the result on this line. This is the tentative tax.
If line 7 is blank, skip lines 12a and 12b and enter the amount from line 11 on line 13. Also skip the discussion for lines 12a and 12b that follows.
taxmap/pubs/p929-009.htm#en_us_publink1000203884

Lines 12a and 12b
(Dividing the Tentative Tax)(p19)

rule
If an amount is entered on line 7, divide the tentative tax shown on line 11 among the children according to each child's share of the total net unearned income. This is done on lines 12a, 12b, and 13. Add the amount on line 7 to the amount on line 5 and enter the total on line 12a. Divide the amount on line 5 by the amount on line 12a and enter the result, as a decimal, on line 12b.
taxmap/pubs/p929-009.htm#en_us_publink1000203885

Example.(p19)

In the earlier example under Line 7 (Net Unearned Income of Other Children), Sharon's Form 8615 shows $1,600 on line 7. The amount entered on line 12a is $2,400, the total of the amounts on lines 5 and 7 ($800 + $1,600). The decimal on line 12b is .333, figured as follows and rounded to three places.
 $800= .333
 $2,400
taxmap/pubs/p929-009.htm#en_us_publink1000203887

Line 13 (Child's Share of Tentative Tax)(p19)

rule
If an amount is entered on line 7, multiply line 11 by the decimal on line 12b and enter the result on line 13. This is the child's share of the tentative tax.
taxmap/pubs/p929-009.htm#en_us_publink1000203888

Step 3. Figuring the Child's Tax
(Form 8615, Part III)(p20)

rule
The final step in figuring a child's tax using Form 8615 is to determine the larger of:
  1. The total of:
    1. The child's share of the tentative tax based on the parent's tax rate, plus
    2. The tax on the child's taxable income in excess of net unearned income, figured at the child's tax rate, or
  2. The tax on the child's taxable income, figured at the child's tax rate.
This is the child's tax. It is figured on Form 8615, lines 14 through 18.
taxmap/pubs/p929-009.htm#en_us_publink1000203889

Line 14 (Child's Taxable Income in Excess of Net Unearned Income)(p20)

rule
If lines 4 and 5 of Form 8615 are the same, the child's taxable income is not more than the child's net unearned income. Enter zero on lines 14 and 15, and go to line 16. Also skip the rest of this discussion and the discussion for line 15 that follows.
If lines 4 and 5 are not the same, subtract line 5 from line 4 and enter the result on line 14. Then, before completing line 15, you must determine the amount of net capital gain and qualified dividends, if any, included on line 14.
taxmap/pubs/p929-009.htm#en_us_publink1000203890

Net capital gain and qualified dividends on line 14.(p20)

rule
If the child does not have any net capital gain or qualified dividends, the amount of the net capital gain and qualified dividends included on line 14 is zero.
If the child has net capital gain, the amount of net capital gain included on line 14 is the amount from line 2 of the child's completed Line 5 Worksheet minus the amount from the last line of that worksheet. (See the earlier discussion for line 8 of Form 8615.)
If the child has qualified dividends, the amount of qualified dividends included on line 14 is the amount from line 1 of the child's completed Line 5 Worksheet minus the amount from the next to the last line of that worksheet. (See the earlier discussion of line 8 of Form 8615.)
taxmap/pubs/p929-009.htm#en_us_publink1000203891

Line 15 (Tax on Child's Taxable Income in Excess of Net Unearned Income)(p20)

rule
Figure the tax on the amount on line 14 using the Tax Table, the Tax Computation Worksheet, the Qualified Dividends and Capital Gain Tax Worksheet, the Schedule D Tax Worksheet, or Schedule J (Form 1040), as follows.
taxmap/pubs/p929-009.htm#en_us_publink1000203892

Child files Form 2555 or 2555-EZ.(p20)

rule
If line 14 includes any net capital gain or qualified dividends and the child files Form 2555 or 2555-EZ, use Using the Schedule D Tax Worksheet for line 15 tax, next, to figure the line 15 tax.
taxmap/pubs/p929-009.htm#en_us_publink1000203893

Using the Schedule D Tax Worksheet for line 15 tax.(p20)

rule
Use the Schedule D Tax Worksheet (in the Schedule D instructions) to figure the line 15 tax on Form 8615 if the child has unrecaptured section 1250 gain or 28% rate gain. Do not attach this Schedule D Tax Worksheet to the child's return.
Complete this Schedule D Tax Worksheet as follows.
  1. On line 1, enter the amount from Form 8615, line 14.
  2. On line 2, enter the qualified dividends included on Form 8615, line 14. (See the earlier discussion for line 14.)
  3. Leave lines 3 through 5 blank.
  4. Enter the amount from line 2 on line 6.
  5. On line 7, enter the net capital gain included on Form 8615, line 14. (See the earlier discussion for line 14.)
  6. Skip line 8.
  7. Enter the amount from line 7 on line 9.
  8. Complete line 10, following the worksheet instructions.
  9. On line 11, enter zero if the child has no 28% rate gain (Schedule D, line 18) or unrecaptured section 1250 gain (Schedule D, line 19). Otherwise, see Worksheet 1 for Line 11 of the Schedule D Tax Worksheet – 28% Rate Gain (Line 9 Tax) and Worksheet 2 for Line 11 of the Schedule D Tax Worksheet – Unrecaptured Section 1250 Gain (Line 9 Tax) under Using the Schedule D Tax Worksheet for line 9 tax, earlier. For each worksheet you complete, subtract line 5 of that worksheet from line 1 of that worksheet, and include the result on line 11 of this worksheet.
  10. If the child is not filing Form 2555 or 2555-EZ, skip steps 11, 12, and 13 below, and go to step 14. If the child is filing Form 2555 or 2555-EZ, go to step 11.
  11. Determine whether there is a line 14 capital gain excess as follows.
    1. Subtract from line 2 of the child's Foreign Earned Income Tax Worksheet the excess, if any, of the amount on line 5 of the child's Form 8615 over the child's taxable income on Form 1040, line 43; Form 1040A, line 27; or Form 1040NR, line 41.
    2. Subtract (a) from the amount on line 14 of Form 8615.
    3. Subtract (b) from the amount on line 10 of this Schedule D Tax Worksheet. If the result is more than zero, that amount is the line 14 capital gain excess. If the result is zero or less, there is no line 14 capital gain excess.
  12. If there is no line 14 capital gain excess, skip step 13 below and go to step 14.
  13. If there is a line 14 capital gain excess, complete a second Schedule D Tax Worksheet as instructed above and in step 14 below but in its entirety and with the following additional modifications. (These modifications are to be made only for purposes of filling out this Schedule D Tax Worksheet.)
    1. Reduce the amount you would otherwise enter on line 9 (but not below zero) by the line 14 capital gain excess.
    2. Reduce the amount you would otherwise enter on line 6 (but not below zero) by any of the line 14 capital gain excess not used in (a) above.
    3. If the child has 28% rate gain, reduce the amount you would otherwise enter on line 11, as figured in step 9, (but not below zero) by the line 14 capital gain excess.
    4. If the child has unrecaptured section 1250 gain, reduce the amount you would otherwise enter on line 11, as figured in step 9, (but not below zero) by the line 14 capital gain excess not used in (c) above.
  14. Complete lines 12 through 45 following the worksheet instructions. Use the child's filing status to complete lines 15, 42, and 44.
Enter the amount from line 45 of this Schedule D Tax Worksheet on Form 8615, line 15, and check the box on that line. Do not attach this worksheet to the child's return.
taxmap/pubs/p929-009.htm#en_us_publink1000203894

Using Schedule J for line 15 tax.(p21)

rule
If Schedule J applies, use it as a worksheet to figure the tax to enter on Form 8615, line 15. On line 1 of this worksheet, enter the amount from Form 8615, line 14. Complete lines 2a through 23 following the Schedule J instructions. Use the child's filing status to complete lines 4, 8, 12, and 16.
Enter the amount from line 23 of this worksheet Schedule J, on Form 8615, line 15, and check the box on that line. Do not attach this worksheet to the child's return.
taxmap/pubs/p929-009.htm#en_us_publink1000203895

Line 16 (Combined Tax)(p21)

rule
Add lines 13 and 15 and enter the total on line 16. This is the child's tax figured at the parent's rate on net unearned income and the child's rate on other income.
taxmap/pubs/p929-009.htm#en_us_publink1000203896

Line 17 (Tax at Child's Rate)(p21)

rule
Figure the tax on the amount on line 4. Use the Tax Table, the Tax Computation Worksheet, the Qualified Dividends and Capital Gain Tax Worksheet, the Schedule D Tax Worksheet, or the child's actual Schedule J (Form 1040), whichever applies. Enter the tax amount on line 17. If it is from the Qualified Dividends and Capital Gain Tax Worksheet, the Schedule D Tax Worksheet, or Schedule J, check the box on that line.
taxmap/pubs/p929-009.htm#en_us_publink1000203897

Child files Form 2555 or 2555-EZ.(p21)

rule
If the child files Form 2555 or 2555-EZ and has a net capital gain or qualified dividends, figure the tax using the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet, whichever applies. To fill out that worksheet, follow the instructions in the footnote to the Foreign Earned Income Tax Worksheet (in the Form 1040 instructions).
taxmap/pubs/p929-009.htm#en_us_publink1000203898

Line 18 (Tax)(p21)

rule
Enter on line 18 the larger of line 16 or line 17. Also enter this amount on the child's Form 1040, line 44; Form 1040A, line 28; or Form 1040NR, line 42. This is the child's tax.
taxmap/pubs/p929-009.htm#en_us_publink1000203899

Child files Form 2555 or 2555-EZ.(p21)

rule
If the child files Form 2555 or 2555-EZ, do not enter the amount from Form 8615, line 18, on the child's Form 1040, line 44. Instead, enter the amount from Form 8615, line 18, on line 4 of the child's Foreign Earned Income Tax Worksheet. Then complete the rest of the Foreign Earned Income Tax Worksheet (in the Form 1040 instructions) to figure the child's tax.
taxmap/pubs/p929-009.htm#en_us_publink1000203900

Alternative Minimum Tax(p21)

rule
A child may be subject to alternative minimum tax (AMT) if he or she has certain items given preferential treatment under the tax law. These items include accelerated depreciation and certain tax-exempt interest income. The AMT may also apply if the child has passive activity losses or certain distributions from estates or trusts.
For more information on who is liable for AMT and how to figure it, see Form 6251.
taxmap/pubs/p929-009.htm#en_us_publink1000192177

Limit on exemption amount (AMT).(p21)

rule
Ordinarily, single individuals can subtract a $51,900 exemption amount from their AMT taxable income. However, a child who files Form 8615 has a limited exemption amount. The child's exemption amount for 2013 is limited to the child's earned income plus $7,150. Figure the child's allowable exemption amount on the worksheet in the instructions for Form 6251, line 29.
taxmap/pubs/p929-009.htm#en_us_publink1000203902

Illustrated Example(p21)

rule
This example shows how to fill out Forms 8615 and 1040A for Joshua Blake. It also shows how to use the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040A instructions to figure Joshua's tax.
Bob and Laura Blake have one child, Joshua. He is 13 and has $1,050 taxable interest, $1,050 qualified dividend income, $700 capital gain distributions, and $1,550 earned income. He does not itemize deductions. Bob and Laura file a joint return with Bob's name and social security number listed first. They claim three exemptions, including an exemption for Joshua, on their return.
Because he is under age 18 and has more than $2,000 unearned income, part of his income may be subject to tax at his parents' rate. A completed Form 8615 must be attached to his return.
Joshua's father, Bob, fills out Joshua's return. He completes Joshua's Form 1040A through line 27, then begins completing Joshua's Form 8615.
Bob enters his name and social security number on Joshua's Form 8615 because his name and number are listed first on the joint return he and Laura are filing. He checks the box for married filing jointly.
He enters Joshua's unearned income, $2,800, on line 1. Joshua does not itemize deductions, so Bob enters $2,000 on line 2. He enters $800 ($2,800 − $2,000) on line 3.
Joshua's taxable income, as shown on his Form 1040A, line 27, is $2,450. This is his total income ($4,350) minus his standard deduction ($1,900). His standard deduction is limited to the amount of his earned income plus $350. Bob enters $2,450 on line 4.
Bob compares lines 3 and 4 and enters the smaller amount, $800, on line 5.
Bob enters $48,000 on line 6. This is the taxable income from line 43 of Bob and Laura's joint Form 1040 return. Joshua is an only child, so line 7 is blank. He adds line 5 ($800), line 6 ($48,000), and line 7 (blank) and enters $48,800 on line 8.
Because Joshua's capital gain distributions and qualified dividends are included on line 5, Bob uses Line 5 Worksheet #1 (in the instructions for Form 8615) to figure out that $200 net capital gain and $300 qualified dividends are included on line 5. He completes that worksheet as follows.
Line 5 Worksheet #1
1.Enter the child's qualified dividends$1,050
2. Enter the child's net capital gain 700
3. Enter the amount from the child's Form 8615, line 12,800
4. Divide line 1 by line 3. Enter the result as a decimal (rounded to at least 3 places). Do not enter more than 1.000.375
5.Divide line 2 by line 3. Enter the result as a decimal (rounded to at least 3 places). Do not enter more than 1.000.250
6. Multiply $2,000 by line 4 750
7.Multiply $2,000 by line 5 500
8.Qualified dividends on Form 8615, line 5. Subtract line 6 of this worksheet from line 1 (but do not enter less than zero or more than the amount on Form 8615, line 5) 300
9. Net capital gain on Form 8615, line 5. Subtract line 7 of this worksheet from line 2 (but do not enter less than zero or more than the excess of Form 8615, line 5, over line 8 of this worksheet) 200
Joshua's parents do not have a net capital gain or any qualified dividends, so no net capital gain or qualified dividends are on line 6 of Joshua's Form 8615. Therefore, the amount of net capital gain on line 8 of Joshua's Form 8615 is $200, and the amount of qualified dividends on that line is $300. Bob uses the Qualified Dividends and Capital Gain Tax Worksheet (in the Form 1040A instructions) and follows the instructions under Using the Qualified Dividends and Capital Gain Tax Worksheet for line 9 tax in the Form 8615 instructions to figure the tax to enter on Joshua's Form 8615, line 9.
Bob enters $300 on line 2 of the Qualified Dividends and Capital Gain Tax Worksheet, and $200 on line 3 of that worksheet. That completed worksheet is shown later as Filled-in Qualified Dividends and Capital Gain Tax Worksheet #1. Bob enters the tax of $6,356 on Joshua's Form 8615, line 9.
He enters the tax from his and Laura's Form 1040 ($6,311) on Joshua's Form 8615, line 10, then subtracts that amount from the $6,356 on line 9, and enters the $45 remainder on line 11. Because line 7 is blank, Bob skips lines 12a and 12b and enters $45 on line 13.
Bob subtracts line 5 ($800) from line 4 ($2,450) and enters the result, $1,650, on line 14. Using the instructions for line 14 earlier, Bob subtracts the net capital gain included on line 5 ($200) from Joshua's net capital gain ($700) to figure the $500 net capital gain included on line 14. He also subtracts the qualified dividends included on line 5 ($300) from Joshua's qualified dividends ($1,050) to figure the $750 qualified dividends included on line 14. He uses a second Qualified Dividends and Capital Gain Tax Worksheet and follows the instructions under Using the Qualified Dividends and Capital Gain Tax Worksheet for line 15 tax, in the Form 8615 instructions, to figure the $41 tax to enter on Form 8615, line 15. That completed worksheet is shown later as Filled-in Qualified Dividends and Capital Gain Tax Worksheet #2.
Bob adds lines 13 and 15 of Form 8615, and enters the sum, $86, on line 16. Then he uses a third Qualified Dividends and Capital Gain Tax Worksheet to figure the $71 tax on Joshua's $2,450 taxable income to enter on Form 8615, line 17. That completed worksheet is shown later as Filled-in Qualified Dividends and Capital Gain Tax Worksheet #3.
Finally, Bob compares lines 16 and 17 and enters the larger amount, $86, on line 18 of Joshua's Form 8615. He also enters that amount on Joshua's Form 1040A, line 28.