Updated October 9, 2026. Quick answer: Form 8814 lets a parent report a child’s interest and dividends on the parent’s own return instead of filing a return for the child. The instructions say “Use this form if you elect to report your child’s income on your return. If you do, your child will not have to file a return.” The election has conditions on the child and on the parent, and the form’s own caution is that “The federal income tax on your child’s income, including qualified dividends and capital gain distributions, may be less if you file a separate tax return for the child instead of making this election.”
Form 1040 for 2025, lines 12 to 38 read line by line: Form 1040 line 16 and Form 1040 line 28.
What the election does and who can make it
This is an election, not a requirement. The instructions say you can make it if the child meets every one of these conditions: “You can make this election if your child meets all of the following conditions.”
| Condition | Wording from the instructions |
|---|---|
| Age | “The child was under age 19 (or under age 24 if a full-time student) at the end of 2025.” |
| Kind of income | “The child’s only income was from interest and dividends, including capital gain distributions and Alaska Permanent Fund dividends.” |
| Size of income | “The child’s gross income for 2025 was less than $13,500.” |
| Filing duty | “The child is required to file a 2025 return.” |
| Joint return | “The child does not file a joint return for 2025.” |
| Estimated tax | “There were no estimated tax payments for the child for 2025” |
| Withholding | “There was no federal income tax withheld from the child’s income.” |
The student test has a definition: “A full-time student is your child who for some part of each of 5 calendar months during the year was enrolled as a full-time student at a school”. January 1 birthdays are handled directly: “A child born on January 1, 2007, is considered to be age 19 at the end of 2025. You cannot make this election for such a child unless the child was a full-time student.”
The mechanics are short. “To make the election, complete and attach Form(s) 8814 to your tax return and file your return by the due date (including extensions).” Children are handled one at a time: “A separate Form 8814 must be filed for each child whose income you choose to report on your return. You can make the election for one or more children and not for others.”
Which parent can use it
Only one parent’s return can carry the election, and the instructions limit it to parents who file “Form 1040, 1040-SR, or 1040-NR” in these situations:
| Situation | What the instructions say |
|---|---|
| Joint return with the child’s other parent | “You are filing a joint return for 2025 with the child’s other parent.” |
| Married, separate returns | “You and the child’s other parent were married to each other but file separate returns for 2025 and you had the higher taxable income.” |
| Unmarried or separated, custodial parent | “The child must have lived with you for most of the year (you were the custodial parent).” |
| Unmarried, lived together with the child | “you qualify to make the election only if you are the parent with the higher taxable income.” |
The instructions also say “Only the parent whose tax return is used can make the election described earlier under Parents who qualify to make the election.” The same family-by-family rules used for Form 8615 apply, covering divorced parents, a custodial parent who remarried and parents who never married. For the other form, see the kiddie tax page.
What the parent reports: the base amount and the 10% slice
Part I of the form adds up the child’s interest, dividends and capital gain distributions, and then applies a base amount. The form’s key lines:
| Line | What it says |
|---|---|
| 4 | “Add lines 1a, 2a, and 3. If the total is $2,700 or less, skip lines 5 through 12 and go to line 13. If the total is $13,500 or more, do not file this form.” |
| 5 | Base amount of $2,700 printed on the form |
| 6 | “Subtract line 5 from line 4” |
| 12 | “Include this amount in the total on Schedule 1 (Form 1040), line 8z.” |
| 13 | Amount not taxed of $1,350 printed on the form |
The IRS explains where the base amount goes: “lines 7 through 12 of the form divide the $2,700 base amount on Form 8814, line 5, between the child’s qualified dividends, capital gain distributions, and other interest and dividend income, reducing each of those amounts.” The remainder, line 12, is added to the parents’ other income. Part II then taxes the first slice of the child’s income on the parent’s return. The rate is stated in the instructions: “the tax rate on the child’s income between $1,350 and $2,700 is 10% if you make this election.” And at the bottom: “Note: The amounts at $1,350 and below are not taxed when using this election.”
The following is an illustration with made-up amounts, not an IRS example, using only taxable interest:
| Item | Amount | Note |
|---|---|---|
| Child’s taxable interest (line 4 total) | $3,000 | Illustration input |
| Base amount (line 5) | $2,700 | Printed on the form |
| Line 6: amount added to the parents’ income | $300 | Computed: $3,000 minus $2,700 |
| Slice taxed at 10% (income between $1,350 and $2,700) | $1,350 | Computed: $2,700 minus $1,350 |
| Tax on that slice | $135 | Computed: 10% of $1,350 |
In the illustration the $300 on line 6 joins the parents’ income and is taxed at the parents’ rate, and the $135 is the 10% slice. The instructions also work a case with dividends. In it, “They subtract the base amount on line 5, $2,700, from the amount on line 4, $2,800, and enter the result, $100, on line 6.” “This is the total amount from Form 8814 to be reported on their return.”
Effects on the rest of the parents’ return
The election adds income to the parents’ return, so other items can shrink. The instructions say “If you use Form 8814, your increased adjusted gross income may reduce certain deductions or credits on your return, including the following.” The list includes “Deduction for contributions to a traditional IRA.” “Child tax credit.” “Education tax credits.” and “Earned income credit.” For the child tax credit, see child tax credit 2026; for a grandchild, see claiming your grandchild as a dependent.
Some tax items follow the child’s income to the parent. “All income reported on line 12 is included in the parents’ modified adjusted gross income.” A Schedule B can also be triggered: “You must file Schedule B if this amount plus the parents’ dividends is more than $1,500.” The election can also change estimated tax: “If you plan to make this election for 2026, you may need to increase your federal income tax withholding or your estimated tax payments to avoid the penalty.”
When the election may cost more, and how to compare
The instructions warn that the election removes things the child could use alone: “If you elect to report your child’s income on your return, you cannot take certain deductions that your child could take on his or her own return such as:” “Additional standard deduction of $2,000 if the child is blind,” “Penalty on early withdrawal of child’s savings, and” “Itemized deductions such as the child’s charitable contributions.”
Qualified dividends and capital gain distributions are the main trap: “you may pay up to $135 more tax if you make this election instead of filing a separate tax return for the child.” The reason given is “if you file a separate return for the child, the tax rate may be as low as 0% because of the preferential tax rates for qualified dividends and capital gain distributions.”
The instructions give a method for choosing, not a rule of thumb: “To figure the most beneficial tax on your child’s income, first figure the tax on your child’s income as if they are filing a return. Next, figure the tax as if you are electing to report your child’s income on your return. Then, compare the methods to determine which results in the lower tax.” The other path is Form 8615, where the child files and part of the child’s unearned income is taxed at the parent’s rate; the 2025 instructions for that form note the election as an alternative. See the 2027 kiddie tax page for how the same rules look going forward.
Which revision applies
The edition read for this page is the 2025 Instructions for Form 8814 together with the 2025 form, which is the revision irs.gov served when it was read on 2026-10-09. The dollar amounts below are the 2025 amounts and are not a forecast for any other year. Check the year printed on the form you are filing. The form prints “Parents’ Election To Report Child’s Interest and Dividends” and the instructions point to updates: “For the latest information about developments related to Form 8814 and its instructions, such as legislation enacted after they were published, go to IRS.gov/Form8814.”
Common mistakes
- Treating the election as automatically cheaper because it saves a child’s return. The form’s own caution says the tax may be less if you file a separate return for the child.
- Overlooking the effect on the parents’ return. The instructions list deductions and credits, such as the child tax credit, that the added income may reduce.
- Making the election when the child has income that is not interest or dividends, or has estimated tax payments or withholding. The instructions make each of those a condition.
Related: kiddie tax, kiddie tax 2027, child tax credit 2026, and claiming your grandchild as a dependent.
Sources
- Instructions for Form 8814 (2025): https://www.irs.gov/pub/irs-pdf/i8814.pdf
- Form 8814 (2025): https://www.irs.gov/pub/irs-pdf/f8814.pdf
Read from the IRS documents linked above on October 9, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.