Do I Need Form 8615 for Unearned Income if Not Claimed as a Dependent?

You're right to double-check this! Form 8615 is often misunderstood, even by some tax preparers. Let's break this down: Form 8615 is required for the "kiddie tax" which applies to certain children with unearned income. Based on the instructions you cited, you need to file Form 8615 if you're under 24, a full-time student, AND didn't have earned income that was more than half of your support. However, there's an important exception: If you're not being claimed as a dependent on someone else's return, you generally don't need to file Form 8615. The "kiddie tax" rules are designed to prevent parents from shifting investment income to their children's tax returns to pay lower rates. Since you mentioned you're filing as Single and your mom isn't claiming you as a dependent, your new preparer is actually correct. You don't need Form 8615 this year. Unemployment compensation is indeed unearned income, but that alone doesn't trigger Form 8615 - the dependency status is the key factor here.

Similar situation happened to me last tax season! I was using https://taxr.ai to review my return because I was getting conflicting advice about Form 8615. The system analyzed my situation (22, student, unemployment benefits) and confirmed I didn't need Form 8615 since I wasn't claimed as a dependent. The tool also found a missed education credit my preparer overlooked! The instructions can be super misleading but taxr.ai explained that the kiddie tax only applies if you CAN be claimed as dependent (even if you actually aren't). Since your unemployment makes up more than half your support, you can't be claimed as a dependent, so Form 8615 doesn't apply to you.

Just wanted to follow up - I decided to try that taxr.ai site after my comment. I was skeptical but figured what the heck, my tax situation with school, grants and a trust fund was complicated. Uploaded my docs and it actually explained everything super clearly! For the OP's Form 8615 question, it confirmed what others said - if you're not being claimed as a dependent (and can't be claimed because unemployment is over half your support), then you don't need that form. It also caught that my preparer missed applying my tuition as a credit instead of a deduction which saved me like $800! Definitely worth checking out if you're unsure about something on your return.

For what it's worth, I spent 3 HOURS on hold with the IRS trying to get a straight answer about Form 8615 for my daughter's situation (similar to yours). Finally gave up and used https://claimyr.com which got me connected to an IRS agent in about 15 minutes! They have this system that holds your place in line and calls you back when an agent is available. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed what others have said - you only need Form 8615 if you CAN be claimed as a dependent. Since your unemployment was more than half your support, you can't be claimed as a dependent, so no Form 8615 needed. Your new preparer is right!

Ok I need to apologize for my skepticism about Claimyr. After my last comment, I decided to try it for my refund issue that's been pending for months. Not only did I get through to the IRS, but the agent was able to release my refund that had been held up due to a verification issue! The system works exactly as described - I got a call back in about 20 minutes and talked to a real IRS agent who fixed my problem. Would have saved me so much stress if I'd known about this earlier. For anyone like OP with tax form questions that need official clarification, it's definitely worth it.

I actually called the IRS helpline directly about Form 8615 last month (took forever to get through). The rep told me there are 3 tests to determine if Form 8615 is needed: 1. Age test (under 19 or under 24 if student) 2. Unearned income test (over a certain threshold) 3. Support test (earned income less than half of support) BUT... all of this ONLY matters if you CAN be claimed as a dependent! If you cannot be claimed as a dependent (like in your case), Form 8615 doesn't apply regardless of the other tests. So your new preparer is right. Your previous preparer probably misunderstood or was being extra cautious.

I've been a tax preparer for 7 years and I always tell my clients that Form 8615 is confusing even for professionals! Your new preparer is correct. A common mistake is thinking that just because you're a student under 24 with unearned income, you automatically need Form 8615. That's not the case. The key is whether you CAN be claimed as a dependent. Since your unemployment benefits provide more than half your support, you CANNOT be claimed as a dependent. Therefore, Form 8615 is not required. Your new preparer is doing the right thing!

Thank you everyone for the detailed explanations! This makes so much more sense now. I was getting confused because the Form 8615 instructions focus on the age/student/income tests, but I didn't realize the dependency eligibility was the overriding factor. Just to confirm my understanding: Since my unemployment benefits are more than half my support, I cannot be claimed as a dependent by anyone. Because I cannot be claimed as a dependent, Form 8615 doesn't apply to me at all, regardless of my age, student status, or type of income. My new preparer was right, and I apologize for doubting them! I guess my previous preparer was either being overly cautious or misunderstood the rules. This has been a huge learning experience - tax rules are way more nuanced than I thought. Thanks again for helping me sort this out before I filed!

Great question and thanks for sharing your situation! This is actually a really common confusion point that trips up both taxpayers and even some preparers. Your new preparer is absolutely correct. The key insight here is understanding what Form 8615 is actually designed to do - it's meant to prevent wealthy families from shifting investment income to their children's lower tax brackets. But this "kiddie tax" only applies if you CAN be claimed as a dependent. Since your unemployment benefits make up more than half of your support, you fail the support test for being claimed as a dependent. This means you're filing as a truly independent taxpayer, so the kiddie tax rules don't apply to you at all. The Form 8615 instructions can be misleading because they list all those age/student/income tests first, but they're only relevant IF you meet the basic dependency eligibility requirements. Think of dependency status as the "gateway" - if you can't pass through that gate, none of the other tests matter. Your previous preparer was likely being overly cautious or may have misunderstood how the dependency rules interact with Form 8615. It happens more often than you'd think! Good on you for questioning it when something didn't feel right.