8814 Form

Parents use 8814 Form to report dividend income on their child’s tax return. It is part of a group of forms that are considered the most commonly used by the IRS. Form 8814 is designed to be attached to the main tax return. This form must be filled out for each child included in the parent’s return. Parents can also make a backup withholding election for one child.

Children who receive more than $2,200 in unearned income will have to pay tax on this income. Their tax is calculated at 10%, and their unearned income is added to the parent’s tax on Form 1040. If the parent’s rate is higher than the child’s, the parent may be able to include the child’s income in their own tax return.

How to Fill Out 8814 Form?

In order to report your child’s investment income on your tax return, you will need to complete 8814 Form. This form can also be used to report your child’s foreign financial account. If you decide to report your child’s interest and dividend income on your tax return, you will be required to include the interest item’s Type Code field. In the U.S. Ob $ or % field, you will enter the portion of the interest item that is attributable to United States government obligations.

You can also report your child’s income on your tax return by filing the 8615 Form. It is used to calculate the appropriate tax rate for your child. Depending on your income, you may need to use different amounts for your child. For example, if your taxable income is lower than your child’s, you can enter a higher amount for the child. Once you have completed the 8814 Form, you will need to attach it to your tax return. It is a good idea to review Publication 929 before completing the form.

If you do not file a return with your child, you will need to file a separate return with the IRS. This can be a very complicated process if you have more than one child. However, if you do file a return with your child, you do not have to submit the 8814 Form.

Important Note: The information on line 21 of Form 1040 must include Form 8814. Also, the amount of interest on a tax-exempt interest item on private activity bonds may be included in your own tax preference items.

Form 8814 Instructions

Part I: Child’s Interest and Dividends To Report on Your Return

• Line 1a: Enter your child’s taxable interest
• Line 1b: Enter your child’s tax-exempt interest
• Line 2a: Enter your child’s ordinary dividends ( Alaska Permanent Fund dividends included )
• Line 2b: Enter your child’s qualified dividends ( included on line 2a)
• Line 3: Enter your child’s capital gain distributions
• Line 4: 
  • Add lines 1a, 2a, and 3
  • If the total is $2,200 or less, skip lines 5 through 12 and go to line 13
  • If the total is $11,000 or more, do not file this form
  • Your child must file his or her own return to report the income
• Line 5: Enter 2,200 (the base amount).
• Line 6: Subtract line 5 from line 4.
  • If both lines 2b and 3 are zero or blank, skip lines 7 through 10, enter -0- on line 11, and go to line 12.
  • Otherwise, go to line 7
• Line 7: Divide line 2b by line 4. Enter the result.
• Line 8: Divide line 3 by line 4. Enter the result.
• Line 9: Multiply line 6 by line 7. Enter the result.
• Line 10: Multiply line 6 by line 8. Enter the result here.
• Line 11: Add lines 9 and 10
• Line 12: Subtract line 11 from line 6
  • Include this amount in the total on Schedule 1 (Form 1040), line 8z
  • In the space next to that line, enter “Form 8814” and show the amount.
  • If you checked the box on line C above, see the IRS instructions for Form 8814.

Part II: Tax on the First $2,200 of Child’s Interest and Dividends

• Line 13: Enter 1,100 ( Amount not taxed )
• Line 14: Subtract line 13 from line 4. 
  • Enter -0 if the result is zero or less.
• Line 15: Tax. Is the amount on line 14 less than $1,100? Yes or No.
  • If you check NO: Enter $110 and see the Notes below.
  • If you check YES: Multiply line 14 by 10% (0.10). Enter the result and read the Notes below.

Notes:

1. If you checked the box on line C above, see the instructions.
2. Otherwise, include the amount from line 15 in the tax you enter on Form 1040,1040-SR, or 1040-NR, line 16.
3. Be sure to check box 1 on Form 1040, 1040-SR, or 1040-NR, line 1.