Desktop: Form 8814 - Parents' Election to Report Child's Interest and Dividends

Parents may choose to include their child’s income from dividends, interest, and capital gains with their return provided that the total taxable dividends, interests, and capital gains is not and does not exceed $11,000. In the event that the total gets to $11,000, the child is mandated to file their own return. 

Certain qualifications must be met by both the parent and the child for the parent to make the election. For more information, check out Form 8814 instructions. 

To include the income of the child in the parent’s return in Taxx Savage Pro: 

• Go to the Main Menu of the tax return (Form 1040) 
• From the menu, select Tax Computation 
• Then Child’s Interest and Dividends (8814) 
• New - select the child 
• In the menu lines provided, enter the interest, dividend, and capital gains info of the child. 

The first $1,100 of income isn’t taxed, and depending on the total tax return of the parent can be affected in either of the following ways: 

1. Tax on the child’s income - The child’s tax on unearned income that is more than $1,100 up to $2,200 is computed at a rate of 10%. This tax is included into the tax of the parent, on Form 1040. 
2. Additional Income included on Parent’s return - The income amount that is more than $2,200 is included in the return of the parent as Other Income on Schedule 1, notated as “Form 8814” 

Check out Publication 929 for information on the impact of including Form 884 in a return. 

Reminder: Form 8814 must be filled for every child included in the tax return of the Parent. 

Additional Information:

IRS: Publication 929, Tax Rules for Children and Dependents

IRS: Form 8814, Parents’ Election To Report Child’s Interest and Dividends