college kids collecting unemployment

[dkelley]

Did you notice that college kids collecting unemployment groups that income into the 'unearned' pool of money... making the kiddie tax form 8615 come into play.  Even if you check NO to the investment income question, it limits their standard deduction to 4000.  This can't be correct?  Any thoughts?!

Thank you!  

[TaxGuyBill]

Yes, Kiddie Tax may apply.

No, the Standard Deduction is not necessarily $4000.  It is generally the amount of their Earned Income plus $350 (up to a maximum of $12,400).

https://www.irs.gov/pub/irs-pdf/p501.pdf#page=25

[Just-Lisa-Now-]

Yep kiddie tax is kicking in on dependents!