J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

1.13 Filing for Your Child

The income of your minor child is not included on your return unless you make a special election to report a child’s investment income (24.4). A minor is considered a taxpayer in his or her own right. If the child is required to file a return but is unable to do so because of age or for any other reason, the parent or guardian is responsible for filing the return.

A tax return must be filed for a dependent child who had more than $950 of investment income and no earned income (for personal services) for 2012. If your child had only earned income (for personal services) and no investment income, a tax return must be filed if the earned income exceeded $5,950. See page 4 for further filing threshold rules.

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Caution

Kiddie Tax May Apply to Investment Income

If your child has 2012 investment income exceeding $1,900, his or her tax liability generally must be figured on Form 8615, and under the “kiddie tax” rules, the excess over $1,900 will be taxed at your top tax rate rather than at your child’s rate. The kiddie tax applies to children under age 18, and also to children who at the end of the year are either age 18 or full-time students under age 24 if their earned income is no more than 50% of their total support for the year (24.2).

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If the child is unable to sign the return, the parent or guardian should sign ...