Understanding the kiddie tax on Form 8615 for my high school sibling with unemployment
Title: Understanding the kiddie tax on Form 8615 for my high school sibling with unemployment 1 My sister is 17 and a junior in high school. She made about $2600 last year from her part-time job at the mall before she got let go when the store closed down. After that, she started receiving unemployment benefits for the remainder of the year. I've been trying to help her file her taxes, but we're completely lost when it comes to Form 8615 and this "kiddie tax" thing. Our parents aren't much help either since they've always had someone else do their taxes. We live in Oklahoma if that makes any difference. Any advice on what information we need to fill out Form 8615 correctly would be super appreciated!
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Jamal Carter
8 The kiddie tax on Form 8615 applies to certain unearned income of children under 19 (or under 24 if full-time students). Since your sister is 17, this could potentially apply to her situation. The kiddie tax is designed to prevent parents from shifting income to their children to take advantage of the children's lower tax rates. Form 8615 essentially calculates tax on a child's unearned income at the parent's tax rate when that unearned income exceeds $2,300 (for 2025 filing). For your sister, you'll need to determine if the unemployment benefits count as "unearned income" (they do) and then figure out if Form 8615 applies. You'll need your parents' tax information to complete this form, including their taxable income, filing status, and tax amounts. The form will walk you through calculating how much of her unearned income is taxable at your parents' rate.
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Jamal Carter
•15 Thanks for the explanation. So the unemployment benefits are considered "unearned income"? Does that mean her $2600 from the mall job is "earned income"? And does she need to file Form 8615 if she made less than $2,300 in unemployment benefits?
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Jamal Carter
•8 Yes, her $2600 from the mall job is definitely considered earned income. The unemployment benefits are unearned income. If her unemployment benefits (the unearned income) were less than $2,300, then she wouldn't need to file Form 8615. The kiddie tax only kicks in when unearned income exceeds that threshold. If the benefits were more than $2,300, then you'd need to complete Form 8615, and you'd need your parents' tax information to calculate the tax properly.
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Jamal Carter
13 After struggling with the kiddie tax for my son last year, I found https://taxr.ai super helpful! I was completely confused about which forms to file since my son had both a summer job and some investment income from his grandparents. The regular tax software kept giving me weird results that didn't make sense. Taxr.ai helped me understand exactly how Form 8615 applied to our situation. They analyzed his tax documents and explained which parts of his income were subject to the kiddie tax and which weren't. Best part was they showed how to properly report everything so we didn't miss anything important!
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Jamal Carter
•6 How does it work with parents who file separately? My stepdaughter has some investment income from her biological mom, but I'm the one helping with her taxes. Would taxr.ai help figure out whose tax rate applies?
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Jamal Carter
•19 Does it help with state tax forms too? My teenager has unearned income and our state has its own version of the kiddie tax that's super confusing.
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Jamal Carter
•13 For parents filing separately, taxr.ai handles that specific situation - you'd upload the relevant info and it tells you whose rate applies (usually the parent with custody for more of the year, but there are exceptions depending on your specific situation). Yes, it absolutely helps with state tax forms! That's one of the best features. It shows you exactly which state forms correspond to the federal kiddie tax forms and how the calculations differ. Some states follow the federal rules exactly while others have their own thresholds and rates.
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Jamal Carter
19 Just wanted to update that I tried taxr.ai after seeing it mentioned here and it was exactly what I needed! My teenager has a mix of income from a weekend job, some dividends from stocks his grandpa gave him, and a small scholarship. The regular tax software was completely messing up the kiddie tax calculations. Taxr.ai sorted everything properly - showed which income was subject to kiddie tax and which wasn't. It even pointed out that some of his scholarship was reportable income (the room and board portion), which I had no idea about. Saved me from making a big mistake and possibly getting audited. Definitely recommend for anyone dealing with Form 8615!
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Jamal Carter
11 If you're trying to get specific answers from the IRS about the kiddie tax, good luck getting through to them directly! After spending DAYS trying to call the IRS about my daughter's Form 8615 question, I found https://claimyr.com which got me connected to an actual IRS agent in under 45 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had a specific question about how to report my daughter's investment income that didn't fit any of the examples in the tax form instructions. The IRS agent walked me through exactly how to complete Form 8615 for our unique situation. Totally worth it rather than guessing and risking an audit!
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Jamal Carter
•23 Wait, so this service somehow gets you to the front of the IRS phone queue? How is that even possible? Sounds like a scam to me. I've been calling for weeks about my son's kiddie tax situation and just get endless hold music.
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Jamal Carter
•16 How much does this cost? I'm desperately trying to figure out if the kiddie tax applies to my nephew's social security survivor benefits, but I can't get through to the IRS.
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Jamal Carter
•11 It's not about "cutting the line" - they use technology that continuously redials and navigates the IRS phone tree until a connection is made, then it calls you. It's basically doing what you'd be doing manually for hours, but automated. I can't speak to cost here, but I can tell you that for my specific question about Form 8615 and my daughter's investment income, getting a definitive answer directly from the IRS was invaluable. They gave me information I couldn't find anywhere online about how to report her specific type of dividends on the form.
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Jamal Carter
23 I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I was still stuck with my son's kiddie tax issues and getting desperate, so I tried it. Within 35 minutes I was talking to an actual IRS representative who knew exactly how to handle our situation. My son received both unemployment and had some stocks that his grandparents gifted him that had dividends. The IRS agent clarified exactly how to report each income source on Form 8615 and explained which parent's information to use since we're divorced with shared custody. They even sent me follow-up information by mail with the specific sections of the tax code that applied to our situation. Saved me from making a serious filing error!
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Jamal Carter
7 One important thing to remember about the kiddie tax: it ONLY applies to unearned income above $2,300 (for 2025). The first $1,150 is tax-free and the second $1,150 is taxed at the child's rate. Only amounts above $2,300 get taxed at the parent's rate. So if your sister only received say $2,200 in unemployment, you might not even need to worry about Form 8615 at all! Check the exact amount first.
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Jamal Carter
•1 Thanks for mentioning this! I just checked and her unemployment benefits were about $3100, so it looks like we'll need to use Form 8615 after all. When I use her total income ($2600 earned + $3100 unearned) to figure out her tax bracket, do I use that combined amount? Or does the kiddie tax calculation separate them?
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Jamal Carter
•7 The kiddie tax calculation does separate earned income from unearned income. Her $2600 from the mall job is taxed normally at her own tax rates. For the unemployment benefits of $3100, the first $1,150 is tax-free, the next $1,150 is taxed at her rate, and only the remaining $800 would be taxed at your parents' rate. Form 8615 walks you through this calculation step by step. You'll need your parents' tax info though, specifically their taxable income and tax amount from their return, to complete the form. This is why it gets complicated - you're essentially calculating part of her tax using their information.
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Jamal Carter
4 Does anyone know if stimulus payments or pandemic relief count as unearned income for kiddie tax purposes? My daughter received some unemployment plus the extra federal pandemic amount, and I'm not sure how to treat it on Form 8615.
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Jamal Carter
•8 The regular unemployment benefits count as unearned income and would be reported on Form 8615. However, the stimulus payments (economic impact payments) were technically advance tax credits and are NOT considered income at all - neither earned nor unearned. Those don't get reported as income on the tax return.
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