Tax season can be a bit of a maze, especially when you encounter forms like Form 8615, also known as the "Kiddie Tax" form. This form is crucial for children with significant unearned income, ensuring their investment income is taxed at the parent's marginal tax rate. If you've found yourself needing to edit Form 8615 in TurboTax, you're in the right place! This comprehensive guide will walk you through the process step-by-step, helping you navigate TurboTax with confidence.
Understanding Form 8615: The "Kiddie Tax"
Before we dive into editing, let's quickly understand why Form 8615 exists. The IRS implemented the "Kiddie Tax" to prevent high-income individuals from sheltering investment income by transferring assets to their children, who might be in a lower tax bracket. If your child's unearned income (like interest, dividends, capital gains, etc.) exceeds a certain threshold (which changes annually, e.g., $2,600 for 2024), a portion of it will be taxed at the parent's tax rate.
Who Needs to File Form 8615?
Generally, Form 8615 is required if a child meets all of the following conditions:
The child had more than the specified unearned income threshold (e.g., $2,600 for 2024).
The child is required to file a tax return.
The child was either:
Under age 18 at the end of the tax year.
Age 18 at the end of the tax year and didn't have earned income that was more than half of their support.
A full-time student at least age 19 and under age 24 at the end of the tax year and didn't have earned income that was more than half of their support.
At least one of the child's parents was alive at the end of the tax year.
The child does not file a joint return for the tax year.
If your child's situation changes or you initially entered incorrect information, you'll need to edit Form 8615 in TurboTax.
Your Step-by-Step Guide to Editing Form 8615 in TurboTax
Ready to make those crucial adjustments? Let's get started!
Step 1: Accessing Your TurboTax Return and Locating Form 8615
So, you've realized something needs tweaking on Form 8615. Don't worry, you're not alone! Many users find themselves needing to go back and adjust entries. The first and most important step is to log back into your TurboTax account and find the right place.
Sub-heading: Logging In and Navigating to Your Return
For TurboTax Online Users:
Open your web browser and go to the TurboTax website.
Click on "Sign In" and enter your User ID and Password.
Once logged in, you should see your current tax return. Click "Continue your return" or "Pick up where you left off."
For TurboTax Desktop (CD/Download) Users:
Launch the TurboTax program on your computer.
Open the tax file (.tax file) for the year you are working on.
Sub-heading: Finding Form 8615 within TurboTax
There are a couple of primary ways to locate Form 8615:
Using the Search Function: This is often the quickest method.
Look for a search icon (often a magnifying glass) in the upper right corner of your TurboTax screen.
Click on it and type "Form 8615" or "kiddie tax" in the search box.
A link should appear, often saying "Jump to Form 8615" or "Jump to kiddie tax." Click this link. This will take you directly to the relevant section in the interview process.
Navigating Through the Interview Sections:
In the left-hand navigation panel (often black or dark blue), look for "Federal" (if you're on the child's return, or your return if you're electing to include their income via Form 8814, though Form 8615 is for the child's return).
Then, navigate to "Income & Expenses."
Scroll down and look for a section related to "Less Common Income" or "Child's Income (under 24)." You may need to click "Show More" to reveal it.
Select "Start" or "Revisit" next to the appropriate section. TurboTax will guide you through questions that determine if Form 8615 is required.
Step 2: Identifying the Information to Edit
Once you've landed in the Form 8615 section, it's time to pinpoint what needs changing. Form 8615 requires information from both the child's return and the parent's return.
Sub-heading: Reviewing Child's Unearned Income
TurboTax will typically start by asking questions about the child's income. This includes:
Interest Income (from Form 1099-INT)
Ordinary Dividends (from Form 1099-DIV)
Capital Gains Distributions (from Form 1099-DIV or Schedule K-1)
Other types of unearned income, such as rents or royalties.
Carefully review each of these entries. If you made a mistake here, this is where you'll correct it. For example, if you forgot to enter a 1099-INT or miskeyed a dividend amount, update it now.
Sub-heading: Verifying Parent's Information and Taxable Income
A critical part of Form 8615 is the parent's tax information. TurboTax will ask for:
The parent's name and Social Security Number (SSN).
The parent's filing status (Single, Married Filing Jointly, etc.).
The parent's taxable income from their Form 1040 (Line 15 for 2024).
Information regarding the parent's qualified dividends and capital gains (if applicable).
It's imperative that this information is accurate and matches the parent's actual tax return. Any discrepancies here can lead to incorrect Kiddie Tax calculations or even rejection of the return. If the parent's return hasn't been finalized yet, you might need to wait or use an estimate and then revisit this section once the parent's final taxable income is known.
Sub-heading: Age and Support Conditions
TurboTax will also confirm the child's age at the end of the tax year and ask questions about their earned income relative to their support. These questions are crucial for determining if the Kiddie Tax rules even apply.
If you initially answered these questions incorrectly, go back and adjust them. For example, if your 18-year-old had earned income that was more than half of their support, they might not be subject to the Kiddie Tax.
Step 3: Making the Necessary Edits in the Interview Mode
TurboTax's strength lies in its interview-style approach. It's almost always recommended to make edits here rather than directly in Forms Mode, as the interview ensures all related calculations and forms are updated correctly.
Sub-heading: Navigating Through the Questions
As you revisit the Form 8615 section (or "Child's Income" section), TurboTax will present a series of questions.
Read each question carefully. Don't rush through them, even if you think you know the answer. The wording can sometimes be subtle and impact the calculations.
When you encounter a question where the previous answer was incorrect, simply change it to the correct value.
For numerical entries (like income amounts or parent's taxable income), ensure you type in the exact figures. Double-check for typos!
Sub-heading: Handling Specific Scenarios
Multiple Children with Unearned Income: If you have multiple children subject to the Kiddie Tax, ensure each child's Form 8615 is handled accurately. TurboTax should prompt you for information for each relevant child.
Parental Information from Different Returns: In cases of separated or divorced parents, or when a custodial parent has remarried, the instructions for which parent's information to use can be complex. TurboTax will guide you, but refer to IRS Form 8615 instructions (available on the IRS website) if you're unsure.
Generally, if parents are married filing jointly, use that joint return.
If married filing separately, use the parent with the higher taxable income.
If unmarried or separated, generally use the custodial parent's return. If the custodial parent remarried and filed jointly, use that joint return.
"Jump To" Links and Navigation: After making an edit, TurboTax often provides "Continue" buttons. Click these to move forward and ensure the changes are registered and propagate through the return.
Sub-heading: Recalculating and Reviewing
After making your edits, TurboTax will automatically recalculate the tax.
It's a very good practice to run the "Error Check" or "Review" feature within TurboTax after making significant changes. This feature helps identify any inconsistencies or missing information that could lead to rejection by the IRS.
Pay close attention to any warnings or errors related to Form 8615. TurboTax is designed to flag common issues.
Step 4: Verifying the Changes in Forms Mode (Optional, but Recommended for Advanced Users)
While the interview mode is the primary way to edit, more advanced users or those who want to see the direct impact of their changes can switch to "Forms Mode" to inspect Form 8615 itself.
Sub-heading: Switching to Forms Mode
For TurboTax Online: In the left-hand navigation, look for "Tax Tools" and then "Tools." You might find an option like "View Tax Summary" or "View Forms." Click on it to switch to Forms Mode.
For TurboTax Desktop: There's usually a "Forms" icon or tab at the top of the screen that lets you switch between "EasyStep" (interview mode) and "Forms" mode.
Sub-heading: Examining Form 8615 Directly
Once in Forms Mode, locate "Form 8615" in the list of forms.
Click on it to open the form.
Carefully review the numbers on each line of Form 8615. Specifically, check:
Part I: Child's Net Unearned Income: Lines 1 through 5 should reflect the child's unearned income and the amount subject to Kiddie Tax.
Part II: Tentative Tax Based on the Tax Rate of the Parent: Lines 6 through 13.
Line 6 (Parent's Taxable Income) should be accurate.
Line 9 (Tax on the amount on line 8 based on the parent's filing status) is particularly important and often where calculation issues arise if the underlying data is incorrect. TurboTax should automatically check the box if it used a specific worksheet (like the Qualified Dividends and Capital Gain Tax Worksheet).
Part III: Child's Tax: Lines 14 through 18, which ultimately determine the tax reported on the child's Form 1040.
Ensure all required fields are filled. Sometimes, an incomplete field can prevent correct calculation or e-filing. If you see any red or highlighted fields, those usually indicate errors or missing information that needs to be addressed back in the interview mode.
Step 5: Final Review and Filing
After making your edits and confirming the information, a thorough final review is paramount before filing.
Sub-heading: Running a Final Error Check
Return to the "File" section of TurboTax.
Before you can file, TurboTax will typically run one final "SmartCheck" or "Error Check." Do not skip this step!
Address any remaining errors or warnings. Some warnings might be informational, but errors will prevent successful filing.
Sub-heading: Saving Your Return
Always save your return after making significant changes. This ensures your progress is not lost. For desktop users, save the .tax file. For online users, TurboTax usually saves automatically, but it's good to confirm.
Sub-heading: Printing a Copy for Your Records
Even if you plan to e-file, it's highly recommended to print a copy of your return for your records. This physical copy can be invaluable for future reference or if the IRS has questions.
Sub-heading: Proceeding with E-filing or Printing for Mail
Once you are confident that Form 8615 and the rest of the return are accurate, you can proceed to either:
E-file: TurboTax will guide you through the electronic filing process. Ensure you receive confirmation that your return was accepted by the IRS.
Print and Mail: If you prefer to mail your return (or if e-filing isn't possible for some reason, such as a manual override on Form 8615 if the parent's SSN is unavailable), print the full return and mail it to the appropriate IRS address.
10 Related FAQ Questions
How to calculate unearned income for Form 8615?
Unearned income for Form 8615 includes all taxable income other than earned income. This typically covers interest, ordinary dividends, capital gains (including capital gain distributions), rents, royalties, and certain trust income. TurboTax will prompt you to enter these amounts from your various tax documents (like 1099-INT, 1099-DIV, 1099-B).
How to know if my child needs to file Form 8615?
Your child needs to file Form 8615 if they meet all five conditions listed earlier in this post: unearned income above the threshold, required to file a return, within specific age limits, at least one parent alive, and not filing a joint return with a spouse. TurboTax will determine this based on your inputs.
How to find my parent's taxable income for Form 8615?
You will find your parent's taxable income on their completed Form 1040, specifically on Line 15. If your parent hasn't finalized their return, you may need to wait or get an estimate from them.
How to correct a rejection related to Form 8615 in TurboTax?
If your return is rejected due to an issue with Form 8615, return to the "Federal" section, then "Income & Expenses," and revisit the "Child's Income" section. Often, re-entering the information or ensuring all parent details are correct and match their return will resolve the issue. Run "Error Check" again before re-filing.
How to delete Form 8615 in TurboTax if it's not needed?
In TurboTax Online, go to "Tax Tools" (left menu) > "Tools" > "Delete a form." Find Form 8615 in the list and click "Delete." For TurboTax Desktop, switch to Forms Mode, select Form 8615, and use the "Remove Form" option. Be aware that if you meet the conditions for the Kiddie Tax, TurboTax will likely re-add it or require you to address why it's not needed.
How to manually override a field on Form 8615 in TurboTax?
While generally not recommended as it can prevent e-filing, you can sometimes manually override fields in "Forms Mode" (for desktop versions). Click on the specific line on Form 8615 you wish to override, and a pop-up or context menu might allow you to enter a custom value. TurboTax will often flag this as a potential error or warning.
How to get parent's tax information if they refuse to provide it for Form 8615?
If a child cannot get the required parent information, they can request it from the IRS by sending a signed, written request after the end of the tax year. This request must state it's to comply with section 1(g) of the Internal Revenue Code, prove attempts were made to get the info from the parent, include proof of the child's age, evidence of unearned income, and the parent's name, address, SSN (if known), and filing status (if known).
How to include qualified dividends and capital gains in Form 8615 calculation?
TurboTax should automatically factor qualified dividends and capital gains into the Form 8615 calculation based on the income you entered for both the child and the parent. It often uses a "Schedule D Tax Worksheet" or "Qualified Dividends and Capital Gain Tax Worksheet" in the background to correctly apply the preferential tax rates.
How to know if "kiddie tax" applies if my child is a college student?
The Kiddie Tax can apply to full-time students aged 19-23 at the end of the tax year if their earned income does not exceed half of their support, and they meet the other criteria for Form 8615 (unearned income above threshold, required to file, etc.). TurboTax will ask specific questions about student status and support to make this determination.
How to ensure all linked forms are updated after editing Form 8615?
When you make changes to Form 8615 through the interview process in TurboTax, the software is designed to automatically update all related forms and calculations (like the child's Form 1040). Running the "Error Check" or "Review" function (often found in the "File" section) is the best way to confirm that all linked forms and figures are consistent and correct before filing.
