Form 8814 lets a parent report a child's interest and dividends on the parent's own tax return, so the child doesn't have to file one. For 2025 it works when the child's only income was interest and dividends, under $13,500 in total. The first $1,350 isn't taxed, the next $1,350 is taxed at 10%, and anything above $2,700 is added to the parent's income.
Every figure here comes from the 2025 Form 8814 and its IRS instructions, as of October 2026. The bands are set for each tax year, so check the form for the year you're filing.
Which children qualify
You can make the election only if every one of these conditions is met for the child:
- Under age 19 at the end of 2025, or under 24 if a full-time student.
- The only income was interest and dividends, including capital gain distributions and Alaska Permanent Fund dividends.
- Gross income for 2025 was less than $13,500.
- The child is required to file a 2025 return and isn't filing a joint return.
- No estimated tax payments were made for the child, including an overpayment from last year applied to 2025.
- No federal income tax was withheld from the child's income.
A full-time student means enrolled full time for some part of each of 5 calendar months. Watch January birthdays: a child born on January 1, 2007 counts as 19 at the end of 2025, so you can only make the election if they were a full-time student.
Which parent files it
If you're married and file jointly, use the joint return. If you file separately, it's the parent with the higher taxable income. If you're divorced or separated, it's the custodial parent, the one the child lived with for most of the year. A custodial parent who remarries can make the election on a joint return with the new spouse.
How the maths works
| Child's interest and dividends | What happens on Form 8814 |
|---|---|
| Up to $1,350 | Not taxed |
| $1,350 to $2,700 | Taxed at 10% on the parent's return, a maximum of $135 |
| Over $2,700 | The excess is added to the parent's income on Schedule 1, line 8z |
| $13,500 or more | You can't use Form 8814. The child files their own return |
- Add the child's taxable interest (line 1a), ordinary dividends (line 2a) and capital gain distributions (line 3).
- If the total is $2,700 or less, skip to Part II.
- Subtract the $2,700 base amount. The part of the excess that comes from qualified dividends and capital gain distributions keeps its own treatment on your return.
- Include the rest on Schedule 1 (Form 1040), line 8z, with "Form 8814" written next to it.
- In Part II, work out the tax on the first $2,700: 10% of the amount above $1,350, or $135 if it's $1,350 or more. That goes into the tax on Form 1040, line 16, with box 1 checked.
You need a separate Form 8814 for each child, and you can choose to make the election for one child and not another.
The part that catches parents out
The form itself carries a warning: the tax on your child's income may be less if the child files their own return. Electing means you lose deductions your child could have taken, such as the $2,000 additional standard deduction for a blind child, the penalty on early withdrawal of the child's savings, and the child's itemized deductions.
The bigger catch is your own adjusted gross income. Adding your child's income can shrink deductions and credits on your return, and the 2025 instructions list the new ones too: the deductions for qualified tips, qualified overtime, seniors and passenger vehicle loan interest, plus the child tax credit, education credits, the child and dependent care credit and the traditional IRA deduction. Run the numbers both ways before you elect, especially if you're close to a phase-out.
There's a quieter cost with qualified dividends and capital gain distributions. The IRS says you may pay up to $135 more by electing, because the slice between $1,350 and $2,700 is taxed at 10% on Form 8814, while on the child's own return it could be taxed as low as 0% under the preferential rates. The IRS's own method is simple: work out the tax as if the child files, then as if you elect, and pick the lower one.
If the child files their own return instead, the kiddie tax rules apply, and the kiddie tax guide explains how.
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Entering the numbers
- Line 1a takes all the child's taxable interest. Tax-exempt interest goes on line 1b and isn't added in.
- If the child received interest or dividends as a nominee that belong to someone else, write the amount and ND next to the line and leave it out of the total.
- Accrued interest paid to a bond seller, amortizable bond premium and OID adjustments are written next to line 1a and left out of the total too.
Other knock-on effects
- Net investment income tax: all income on line 12 counts toward your modified adjusted gross income, and most of it counts as your net investment income.
- Investment interest: the child's income, other than qualified dividends, Alaska dividends and capital gain distributions, counts as your investment income.
- Foreign accounts: if your child had a foreign financial account, you complete Schedule B, Part III, and may need Form 8938.
- Alternative minimum tax: certain tax-exempt interest the child received can affect your AMT on Form 6251.
If the child also has wages or other income, Form 8814 is off the table and they'll need their own return. For the dividend side of your own return, see what Form 1099-INT reports and how Schedule K-1 income is handled.
The verdict
Form 8814 saves a separate return and is cheap for small balances: no tax on the first $1,350 and a maximum of $135 on the next band. Once a child's investment income climbs toward $13,500, or your own income sits near a credit phase-out, a separate return for the child is often cheaper. Work it out both ways each year.
Adding a child's interest and dividends to your return can shrink credits such as the child tax credit, and our walk-through of the child tax credit schedule covers it line by line.
Frequently asked questions
What is the income limit for Form 8814?
For 2025 the child's gross income must be less than $13,500, and it must come only from interest and dividends.
How much of my child's income is tax-free on Form 8814?
The first $1,350 isn't taxed. The next $1,350 is taxed at 10%, and anything over $2,700 is added to the parent's income.
Can I use Form 8814 if tax was withheld from my child's income?
No. The election isn't available if any federal income tax was withheld or estimated tax payments were made for the child.
Is Form 8814 always cheaper than a return for the child?
No. The IRS warns the tax may be less if the child files a separate return, because you lose some of the child's deductions and your higher income can reduce your own credits.
Do I need one Form 8814 per child?
Yes. A separate Form 8814 is filed for each child whose income you report on your return.
