Income Tax Service

Terry Hough

March 21, 2013 Newsletter

Tax Rules for Children Who Have Investment Income

There are special tax rules that affect how parents report a child’s investment income. Some parents can include their child’s investment income on their tax return. Other children may have to file their own tax return.

Here are four facts about the taxability of your child’s investment income.

1. Investment income normally includes interest, dividends, capital gains and other unearned income, such as from a trust.
2. Special rules apply if your child's total investment income is more than $1,900. The parent’s tax rate may apply to part of that income instead of the child's tax rate.
3. If your child's total interest and dividend income is less than $9,500, you may be able to include the income on your tax return. See Form 8814, Parents' Election to Report Child's Interest and Dividends. If you make this choice, the child does not file a return.
4. Your child must file their own tax return if they received investment income of $9,500 or more. File Form 8615, Tax for Certain Children Who Have Investment Income of More Than $1,900, with the child’s federal tax return.

Our office is located at 5200 W. Market Street Greensboro, NC 27409 Phone: 336-852-9505 FAX : 866-616-0471 email:     taxservice@electrofile.com website: ElectroFile Income Tax Service

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Office Hours
Dates		Days	Open	Close
Tax Season	January 17 - April 17	Mon - Fri	9:00am	7:00pm
		Sat	9:00am	3:00pm
Non-Tax Season	April 18 - January 15	Mon - Thurs	9:00am	11:30am