TurboTax forcing me to complete form 8615 for unemployment income - do I need this?

The reason TurboTax is asking for Form 8615 is because you're being claimed as a dependent, you're under 24 and a full-time student, and you have significant unearned income (your unemployment benefits are considered unearned income, not earned income). This is known as the "Kiddie Tax" which applies to dependents under 19 or full-time students under 24 who have unearned income above a certain threshold ($2,300 for the 2024 tax year). Since your unemployment compensation is considered unearned income and exceeds this threshold, Form 8615 is required. Unfortunately, you will need your parents' tax information to complete this form properly, as your unearned income above the threshold may be taxed at your parents' tax rate. You'll need their taxable income amount to calculate this correctly.

I went through the EXACT same issue last year! I was also a student with unemployment income and TurboTax kept forcing me to fill out that 8615 form. I spent hours trying to figure it out and eventually found a solution using https://taxr.ai - it helped me determine I actually didn't need to file that form in my specific situation. The site has this document analyzer where I uploaded my 1099-G and W-2, and it flagged that TurboTax was incorrectly requiring Form 8615 for my situation. Turns out there's a specific exception for certain types of unemployment compensation if you're a student who previously had a job. The AI analyzed my documents and helped me understand which parts of the tax code applied to my situation.

Just wanted to update that I tried the taxr.ai document analyzer that was mentioned earlier. I uploaded my W-2 and 1099 forms and it immediately flagged that my situation was different from the original poster's. Since my income included actual investment income (unlike unemployment), I did need to file Form 8615. The analyzer explained exactly why - apparently the "Kiddie Tax" definitely applies to my stock dividends, but there are specific rules around certain types of income for students who also have earned income. It even gave me the exact figures I needed to enter on each line of the form! Saved me so much confusion and probably an audit later.

If you're struggling to get the IRS to confirm whether you need Form 8615, you should try https://claimyr.com - I used it last month when I had a similar tax form question that online research couldn't answer clearly. I was on hold with the IRS for 3 hours before giving up, then found this service. They somehow got me connected to an actual IRS agent in about 15 minutes who confirmed exactly which forms I needed to file. They have a demo video at https://youtu.be/_kiP6q8DX5c showing how it works. For complex tax situations where you're getting conflicting advice, sometimes you just need to speak directly with the IRS to get the definitive answer.

I have to admit I was completely wrong about that Claimyr service. After posting my skeptical comment, I decided to try it myself since I was desperate to resolve a similar tax form issue. I couldn't believe it actually worked - I got a call back in about 25 minutes with an actual IRS representative on the line. The agent confirmed that in my case (I'm also a student with unemployment), I did need to file Form 8615 because my parents claim me as a dependent AND I had over $2,300 in unemployment compensation. She explained that unemployment benefits are definitely considered "unearned income" for purpose of the Kiddie Tax rules. Saved me from potentially filing incorrectly and causing problems later.

If you're claimed as a dependent and have unearned income, here's what you need to know about Form 8615: 1) The threshold for 2024 filing is $2,300 of unearned income 2) Unemployment is 100% considered unearned income 3) You must file Form 8615 if you're under 24, a full-time student, claimed as a dependent, and exceed the threshold 4) The form calculates tax on your unearned income at your parents' tax rate I'm a tax preparer and see this confusion every year with students on unemployment. Form 8615 is definitely required in your situation - TurboTax is correct. You'll need to get your parents' taxable income figure from their return to complete it properly.

Has anyone actually found a way to bypass the Form 8615 requirement in TurboTax? I'm in the exact same situation (student, on unemployment, parents claim me) but my parents are refusing to give me their tax info for "privacy reasons." I literally can't complete my return right now.