Updated October 24, 2026. Quick answer: Tax Topic 553 is the IRS page on the tax on a child’s investment and other unearned income. It describes two situations: a specific tax on the unearned income of certain children, and an election for parents to report a child’s interest and dividends on their own return.
Quick reference
| Item | What the IRS topic says |
|---|---|
| The two situations | “The following two situations may affect the tax and reporting of the unearned income of certain children.” |
| Tax on unearned income | “Use Form 8615 PDF to figure the child’s tax on unearned income over $2,700 if the child is under age 18, and in certain situations if the child is older (see below).” |
| Parents’ election | “You may be able to elect to report your child’s interest, ordinary dividends, and capital gains distributions on your return.” |
| Effect of the election | “If you make this election, your child won’t have to file a tax return.” |
| Form for the election | “To make this election, attach Form 8814 PDF to your Form 1040, Form 1040-SR or Form 1040-NR if your child meets all of the following conditions.” |
Tax for certain children who have unearned income
The first situation is a tax figured on Form 8615. The IRS topic says “If your child’s interest, dividends, and other unearned income total more than $2,700, it may be subject to a specific tax on the unearned income of certain children.” Our page on the kiddie tax explains the idea in more detail.
The topic lists conditions for attaching the form. It starts with “The child’s unearned income was more than $2,700.” One of the age requirements must also be met, such as “The child was under age 18 at the end of the tax year”. The remaining conditions include “At least one of the child’s parents was alive at the end of the tax year.” and “The child does not file a joint return for the tax year.”
The topic also ties this to another tax: “If your child is required to file Form 8615, the child may be subject to the net investment income tax (NIIT).” It points to Topic no. 559 and Form 8960. See also our page on the net investment income tax.
Parents’ election to report a child’s interest and dividends
The second situation lets a parent report the income instead. The topic says “If you make this election, your child won’t have to file a tax return.” Before that, it sets a ceiling: “If your child’s only income is interest and dividend income (including capital gain distributions) and totals less than $13,500, you may be able to elect to include that income on your return rather than file a return for your child.”
The election uses Form 8814. Among the conditions, the topic lists “Your child’s gross income was less than $13,500 for the tax year.” and “At the end of the tax year your child was under age 19 (or under age 24 if a full-time student).” It also requires that “Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends).”
Two more conditions deal with payments and withholding: “No federal income tax was withheld from your child’s income under the backup withholding rules.” Our page on Form 8814 covers the form itself.
Where this comes from
This page describes the IRS page titled Topic no. 553, Tax on a child’s investment and other unearned income (kiddie tax), as served on irs.gov on October 24, 2026. The IRS page shows that it was last reviewed or updated on 24 Sep 2026. The IRS can change a topic after we read it, and the IRS page controls. General information, not tax or legal advice.
Common mistakes
- Treating the two situations as one rule. The topic describes “two situations” with separate forms
- Assuming Form 8615 applies to any child with investment income. The topic says it applies if “The child’s unearned income was more than $2,700.”
- Using the election for a child with other kinds of income. The topic requires income “only from interest and dividends”
- Overlooking the filing requirement. The topic says “your child must be required to file a return” for either situation to apply
- Expecting a child to file anyway after the election. The topic says “your child won’t have to file a tax return”
Related: IRS tax topics by number, Kiddie tax, Kiddie tax 2027, Form 8615, Form 8814, and Net investment income tax 2026.
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Answer againSources
- IRS, Topic no. 553, Tax on a child’s investment and other unearned income (kiddie tax) (irs.gov): https://www.irs.gov/taxtopics/tc553
- IRS, Tax topics index (irs.gov): https://www.irs.gov/taxtopics
Read from the IRS pages linked above on October 24, 2026. General information, not tax or legal advice. The IRS topic page and the instructions for your own form control, and your own facts decide the outcome.