Form 8615 must be present on a child's return to calculate the appropriate tax rate to use based on the parent's income. This is sometimes referred to as the Kiddie Tax.
Before you start
The parent and child's tax returns need to be completed first, so the family link flows the correct information from the parent's return to the child's return.
To create the family link
- Go to the Tools dropdown menu and select Family Link (8615).
- Select the parent from the Available Clients section, and Add Parent.
- Select the child from the Available Clients section, and Add Child.
- Select Preview Tax Data to review the parent and child tax information.
- Select the parent and child from Data Sections in the left panel and make sure the tax information is correct (the child's age will be displayed in parentheses).
- Select Print to print the parent and the child tax information.
- If you estimated the parent's tax information, select the box Parent's Information is Estimated, and "Estimated" will print on the completed Form 8615, Lines C, 6, 9, and 10 for each child.
- Select Transfer.
- The transferred data can be found on Screen 43, Certain Children (8615).
- Lacerte will transfer all tax information necessary to complete Form 8615 between the parent's and child's tax returns, and will calculate and determine the correct tax rate for the child's investment income.
To update the family link
If there are changes to the return, Lacerte will prompt you to update the family link.
- Select Yes to open the family link.
- Select Preview Tax Data to review the new amounts.
- Select Transfer to update the return.