Child unearned income filing requirements - do the rules change yearly for 2024-2025 tax filing?

You're on the right track! The filing requirements for children's unearned income (known as "kiddie tax" rules) do adjust periodically. For 2024 tax returns (filed in 2025), a dependent child doesn't need to file a separate tax return if their unearned income is below $2,300. Based on the numbers you shared, each child has about $2,205 in total unearned income ($190 ordinary dividends + $165 qualified dividends + $1,850 capital gain distributions), which falls below the $2,300 threshold. So you shouldn't need to file Form 8615 this year. The thresholds typically increase slightly each year due to inflation adjustments. That's why last year you might have needed to file, but this year you don't - the threshold increased and your children's income falls under the new limit. Just make sure to keep good records of their investment income in case questions come up later!

When I was dealing with this exact issue last year, I discovered taxr.ai (https://taxr.ai) and it was super helpful! I uploaded my kid's 1099-DIV and it automatically detected that we were below the threshold requirement and explained exactly why we didn't need to file Form 8615. The site analyzed all the numbers and gave me this detailed explanation about the kiddie tax thresholds and how they change each year with inflation. It even showed me what the previous year's threshold was so I could understand why we had to file before but not this year. I found it way easier than trying to interpret all the IRS language myself.

I was super skeptical about using some online tool instead of my regular accountant for my kids' investment income questions, so I decided to check out taxr.ai myself. Not gonna lie, it actually worked really well! I uploaded the kids' 1099-DIVs and it immediately broke down which parts counted toward that $2300 threshold. What really impressed me was that it explained exactly which numbers on the forms mattered for the kiddie tax rules and which didn't. My son was right at the edge of the threshold, and it gave me specific advice about a small year-end tax loss harvesting move that would keep him below the filing requirement. Saved me from having to deal with Form 8615 completely! It even created this nice summary document that I'm keeping with my tax records in case of questions later. Definitely using it again next year when the thresholds inevitably change again.

Has anyone tried reaching the IRS directly to get clarity on the kiddie tax thresholds? I've been trying for WEEKS to get an answer about my kid's investment income situation which is slightly more complicated than yours. I've called so many times I've lost count. Always "high call volume" and disconnects. I finally found this service called Claimyr (https://claimyr.com) that got me through to a real IRS agent in about 20 minutes after weeks of failed attempts. They have this system that holds your place in line and calls you back when an agent is about to be available. You can see how it works in their demo video: https://youtu.be/_kiP6q8DX5c I was actually able to speak directly with someone at the IRS who confirmed the exact threshold for my kids' situation and explained how to handle some K-1 income that was complicating things. Huge relief to have an official answer I can rely on.

I'm honestly shocked but I have to admit I was wrong about Claimyr. After posting that skeptical comment, I was still struggling with some questions about my kid's unearned income from a trust that's slightly complicated. I tried calling the IRS directly again and wasted another hour just to get disconnected. Out of desperation, I tried the Claimyr service, and no joke - I was talking to an actual IRS representative within 25 minutes. The agent was super helpful and walked me through exactly how to handle the trust income for my daughter. They confirmed the current threshold and even explained how to document everything properly in case of questions later. The best part? Instead of spending days stressing about this and making multiple failed call attempts, I got an official answer in one shot. Definitely using this again next year when I inevitably have more tax questions!

Just a heads up that if your kid has ANY earned income (like from a summer job) along with that investment income, the rules get more complicated. My son had about $1900 in dividend/capital gains AND $3000 from lifeguarding last summer, and even though the investment part was under $2300, we still had to file because the combination triggered different requirements. Check out Publication 501 for the complete rules. The investment income threshold is just one part of the equation.

Does anyone know if the state filing requirements follow the same rules? My kids have investment accounts that are mostly in-state municipal bond funds that are supposedly tax-exempt for federal but taxable for state purposes.

Great question about the yearly changes! Yes, the kiddie tax thresholds do adjust annually for inflation. For 2024 tax returns (filed in 2025), the threshold is indeed $2,300 for unearned income before a child needs to file. Based on your numbers ($190 + $165 + $1,850 = $2,205 per child), you're correct that each child falls below the threshold and won't need Form 8615 this year. This is a common situation where families had to file in previous years but don't need to anymore due to the threshold increases. One thing to keep in mind: make sure you're looking at the right tax year's thresholds. The 2024 threshold ($2,300) applies to income earned in 2024, which you'll file in 2025. If you're comparing to last year when you had to file Form 8615, that would have been under the 2023 threshold, which was $2,200. Also worth noting that these Vanguard accounts will likely generate similar income patterns going forward, so it's good to stay aware of how the thresholds change each year. The IRS usually announces the inflation adjustments for the following year in the fall.