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kiddie tax

Level 3


    Looking for help! Have come across several instances already of student 19-23 with unemployment benefits being subject to kiddie tax because of the CARES Act laws.  I understand that IRS says it is considered unearned income for 8615. Question I have , does anyone have an opinion as to whether or not parents can elect to claim the U/E on their own return as they can with interest and dividend income?  After all it is all unearned income.  If so how would federal and state withholding from the U/E statement be handled?  Parent  has no taxable income after deductions and child tax credits. Any thoughts are appreciated!


Thank you!

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2 Comments 2
Level 15
Level 15

Nope, unemployment goes on the child's return not the parents.

Kiddie tax will be an issue for many of these dependents that got way more money from UI than they would have from working.


Beware on the kiddie tax!!  The program has a serious error and it has not been fixed.  After you enter your information the program will show the tax as $X with no program errors.  But then open the Schedule D.  You do not have to enter anything.  Just open it.  Like magic, the tax will change to $Y, which will be the correct tax.

Had this problem last year and support continually told me there was no problem.  Did Challenge calculation and heard crickets.  Finally had to complain to higher ups at Intuit and they fixed it.

They have the same program problem this year.  I have brought it to the attention of the higher up who helped me last year.

Bottom line, on any return with the kiddie tax, open the schedule D to get the correct tax.