Form 8615: A Guide for Parents and Young Taxpayers
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Key Takeaways
- Form 8615 applies to children and young adults who have more than $2,600 in unearned income in 2025, such as interest, dividends, or capital gains, even if they don’t earn money from a job.
- The tax on this unearned income is calculated using the parent’s tax rate, which is often higher than the rate the child would normally be taxed at.
- This form usually affects dependents under age 18, and full-time students under age 24, as long as they don’t earn enough income from working to cover more than half of their own support.
- Unearned income includes money from sources like investments, savings accounts, trust distributions, and even some kinds of social security benefits for minors.
- Filing Form 8615 doesn’t mean your child owes more tax overall—it just means the IRS wants to make sure the tax rate used reflects what would have been owed if the income stayed in the parent’s hands.
Taxes can be a bit tricky, especially when there are rules that catch families off guard. One of those rules involves Form 8615, or the “Kiddie Tax” form. If you’re a parent or guardian of a child or young adult who has investment income, or if you’re a young person filing your own taxes, you might come across this form. Don’t worry, though—we’ll break it down, explain who it applies to, and show you how to handle it without the headache.
The Kiddie Tax was created to stop parents from shifting investment income to their kids just to take advantage of lower tax rates. Basically, if a child earns more than a certain amount in unearned income (like interest, dividends, or capital gains), that income gets taxed at the parent’s rate instead of the child’s lower rate. It can definitely catch some families off guard, especially if they didn’t realize it applied. But once you know when and how to use Form 8615, it becomes a lot easier to navigate.
Whether you’re helping a child manage their finances or handling your own taxes for the first time, understanding this rule can save you from surprises come tax season.
What Is Form 8615?
Form 8615 is used to figure out the tax on a child’s unearned income when that income exceeds a certain threshold. In 2025, that threshold is $2,600. Unearned income generally means money that wasn’t earned from working—think dividends, interest, capital gains, or even income from a trust.
This form exists because of something called the Kiddie Tax rule. The IRS put it in place to prevent high-income parents from shifting income to their children to take advantage of lower tax rates. So, when a dependent child has a decent amount of unearned income, that portion gets taxed at the parent’s rate instead of the child’s.
Who Has to File Form 8615?
Not every young person with investment income needs to worry about Form 8615, which makes us wish we were that young again. Here’s when it comes into play:
The form is required if the child had more than $2,600 of unearned income in 2025, was under age 18 at the end of the year, or was age 18 and did not have earned income that was more than half of their support. It also applies to full-time students under age 24 who didn’t provide more than half of their own support with earned income. Finally, the child must be required to file a tax return for the year.
So, if your 17-year-old has a brokerage account that brought in $3,000 in interest and dividends, Form 8615 will likely be needed. Same goes for a 20-year-old college student getting income from a family trust while still being supported by parents. The key is to for your child to time its investments adequately so they can anticipate which forms they’ll need to file to prevent this from becoming a hassle.
What Kind of Income Counts?
The key word here is unearned. Unearned income, as you know, includes things like taxable interest, dividends, capital gains distributions, income from trusts, and even some kinds of Social Security payments. It does not include wages, salaries, or income from part-time jobs—those are earned income and are treated differently by the IRS.
If a child has both earned and unearned income, that doesn’t cancel out the need for Form 8615. The IRS looks specifically at the unearned part to decide whether the Kiddie Tax rules apply.
How Does the Tax Work?
This is where Form 8615 comes in. The form calculates how much of the child’s unearned income should be taxed at the parent’s tax rate instead of the child’s. You or your tax software will need to pull in details from the parent’s return, including taxable income and filing status. By doing so you might realize that your child’s tax based on that higher rate, which can make a noticeable difference in how much is owed.
For example, if your child has $5,000 in unearned income, only the first $2,600 gets taxed at the child’s lower rate. The remaining $2,400 is taxed at the parent’s rate, which could be significantly higher depending on your tax bracket.
Can a Child Avoid Filing Form 8615?
While “avoid” is probably not the most accurate term to use here, there are a few cases where you (or more specifically, your child) can bypass this form. If the child’s only income is earned income from a job, or if the unearned income stays under the $2,600 threshold for the year, then there’s no need to file Form 8615.
Also, once a child turns 24 and is no longer a full-time student, or if they are providing more than half their own support through earned income, the Kiddie Tax rules stop applying. That means no more Form 8615 in future years.
How to Fill Out Form 8615
The form itself is relatively short—just one page—but the calculations can be a little involved. You’ll need to gather:
- The child’s tax return information
- The total amount of the child’s unearned income
- The parent’s filing status and taxable income
Once you’ve plugged in all the numbers, the form will calculate the total tax due for the child, combining both earned and unearned income, but using the proper tax rates for each.
If you’re filing electronically using tax software, most programs will walk you through the process step-by-step. Still, it’s a good idea to understand what’s happening behind the scenes so you know how that final tax number was calculated.
Special Situations to Watch Out For
While using the form is not particularly difficult, things can get complicated if the child has multiple sources of income, multiple parents with different filing statuses, or income from certain types of trusts. Also, if the child’s return is being filed separately from the parent’s (as it usually is), you’ll still need to coordinate between both returns. In some cases, it might be worth asking a tax professional to help double-check everything.
Also, if the child is married or not a U.S. citizen, other rules might apply, so it’s worth digging a little deeper or asking for help in those less-common cases. We suggest the latter, since these complications will usually require that you hire a lawyer for legal advice anyway, so it’s better to be prepared.
The Final Word on Form 8615…
Form 8615 might sound like one of those obscure tax forms you’ll never need to deal with, but if you’re raising financially savvy kids or helping a young adult with their taxes, it could become very relevant. The IRS takes the Kiddie Tax rules seriously, and failing to file Form 8615 when it’s required can lead to penalties or interest.
So if your child is earning from investments, savings accounts, or a family trust, take a few minutes to see if Form 8615 applies. It’s not the most exciting part of tax season, but getting it right means one less thing to worry about come April.
Form 8615: FAQ
1. What exactly is the Kiddie Tax, and how does it connect to Form 8615?
The Kiddie Tax is a tax rule designed to stop parents from shifting investment income to their kids in order to pay less tax. When a child has over $2,600 in unearned income, the IRS steps in and says, hold up, we’re going to tax that excess income at the parent’s higher rate instead. Form 8615 is the form used to calculate and report that tax. It helps determine how much of the child’s unearned income should be taxed at the parent’s rate and how much, if any, can still be taxed at the child’s lower rate.
2. Who exactly needs to file Form 8615?
Form 8615 is required if the child has more than $2,600 in unearned income during the year, is required to file a tax return, and meets one of the age or dependency conditions. That usually includes anyone under 18, or a full-time student under 24, who didn’t pay for more than half of their own support with earned income. It also applies whether or not the child is filing their own return, as long as they’re still being claimed as a dependent by their parent or guardian. So if your college student is living off a trust and not paying for their own lifestyle, this form probably applies.
3. What kinds of income count as “unearned”?
Unearned income is basically any money the child receives that doesn’t come from a job. That means things like interest from savings accounts, dividends from investments, capital gains from selling stock, income distributed from a trust, and even rental income in some cases. It does not include wages from a part-time job, babysitting, or any self-employment income they may have earned. The IRS is very specific about this, and only unearned income pushes someone into Kiddie Tax territory and triggers the need for Form 8615.
4. Can my child avoid filing Form 8615 if they have both earned and unearned income?
Not necessarily. Even if your child has earned income from a job, if their unearned income alone goes over the $2,600 threshold, then Form 8615 still has to be filed. The earned income doesn’t cancel it out. However, if they’re providing more than half of their own support with that earned income, and they’re at least 18 (or a full-time student over 18), then they might be off the hook because one of the Kiddie Tax conditions wouldn’t apply anymore. It’s not just about the type of income—they also look at the overall financial picture and how independent the child is.
5. How does filing Form 8615 actually affect the tax bill?
Form 8615 can significantly increase the amount of tax your child owes on their return if they have a lot of unearned income. That’s because instead of using the child’s usually low tax rate, the IRS uses the parent’s rate on anything over $2,600. Let’s say your child earns $3,500 in dividends—$900 of that would be taxed at your rate, not theirs. Depending on what tax bracket you’re in, that could mean the difference between paying just a few bucks or a few hundred. It doesn’t change the way the rest of their income is taxed, just the unearned portion above the threshold.
6. What happens if I don’t file Form 8615 when I’m supposed to?
If your child is supposed to file Form 8615 and doesn’t, it can lead to penalties, interest, and possibly an audit if the IRS catches the mistake. Even if it seems like a minor thing, they take Kiddie Tax rules pretty seriously. Missing this form could also throw off the numbers on your child’s tax return, which might delay any refund they’re expecting or cause them to owe more later. If you’re unsure, it’s better to file it and get it right the first time than to have to amend the return later or deal with IRS letters asking for corrections.
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