Unemployment benefits and Kiddie Tax

[Buddy1]

Client is 17 years old, received $17,000 unemployment benefits and a W-2 for $ 2,000. Because of age, needs to be claimed on parent's return, net of the unemployment exclusion at the parent' much higher rate.  Any work around for this?

[sjrcpa · Accepted solution]

Kid can be claimed as a dependent on his parents' return.

Kid files own return to report wages and unemployment (taking into account exclusion). Non excluded unemployment is unearned in come for kiddie tax purposes.

I think this is what you meant but the wording was quite unclear.

[Buddy1]

Thanks,

Yes, that is what I meant and I read it the same way, hoping that I was wrong!