Do I Include My Child’s Income on My Tax Return?

In most cases, no — you do not include your child’s income on your tax return. A dependent child with income above the filing thresholds files their own Form 1040. There is one narrow exception: if your child’s only income was interest, dividends, and capital gain distributions totaling less than $13,500, and several other conditions are met, you can elect to report that income on your return using Form 8814.¹ Outside that election, the child files separately, even if you still claim them as a dependent.

The One Case Where You Can Include It

The IRS allows parents to fold a child’s investment income into their own return as a convenience, but every one of these conditions must be met:²

The child’s only income was interest, dividends, and capital gain distributions. Any wages, tips, or self-employment income rules out the election.
The child’s gross income was less than $13,500.¹
No federal income tax was withheld from the child’s income, and no estimated tax payments were made in the child’s name.
The child was not subject to backup withholding.
You are filing jointly with the child’s other parent, or you are the custodial parent.

If your child had even a dollar of wages or gig income, or a tax payment was made in the child’s name, Form 8814 is off the table and the child files separately.

Why the Election Can Cost More Than It Saves

Including your child’s income on your return raises your adjusted gross income. A higher AGI can reduce or eliminate tax benefits that phase out at income thresholds, including the child tax credit, education credits, the earned income credit, the student loan interest deduction, and the deduction for traditional IRA contributions.² If your household sits anywhere near a phase-out, the time saved by skipping a second return can be smaller than the credits you lose. Run the numbers both ways before electing.

One more thing to know if college is on the horizon: making the Form 8814 election does not hide the income from the FAFSA. That income still has to be reported as the student’s income on the aid application, and student income is assessed at 50% after a protection allowance under the Student Aid Index calculation.³

When Your Child Has to File Their Own Return

If the Form 8814 election is not available or not worth taking, the next question is whether your child needs to file at all. A dependent’s filing threshold depends on the type of income. For the 2026 tax year, based on the IRS inflation adjustments:⁴

Earned income only (wages, tips, self-employment): a return is required if earned income exceeds $16,100.
Unearned income only (interest, dividends, capital gains): a return is required if unearned income exceeds $1,350.
Both earned and unearned income: a return is required if gross income exceeds the greater of $1,350 or earned income plus $450.
Self-employment income: a return is required if net self-employment earnings reach $400, regardless of total income.

A dependent’s standard deduction is not a flat $16,100. It equals the greater of $1,350 or the child’s earned income plus $450, capped at $16,100.⁴ A teenager who earned $4,000 at a summer job gets a $4,450 standard deduction. A child with no earned income but $2,000 in dividends gets $1,350.

Even if your child falls under every threshold, file a return anyway if federal income tax was withheld from their pay. That is the only way to get the withheld money refunded.

Earned vs. Unearned Income

Which category your child’s income falls into drives everything else. Earned income is money received for work: wages, salaries, tips, and net self-employment profit. It is taxed at the child’s own rate, and the standard deduction usually shelters most of it.

Unearned income is money from investments or assets: interest from a savings account, dividends from stocks in a custodial account, capital gain distributions from mutual funds, or trust distributions. Unearned income is what triggers both the Form 8814 option and the Kiddie Tax.

The Kiddie Tax

Congress created the Kiddie Tax to stop parents from parking investments in a child’s name to take advantage of a lower bracket. The rule taxes a child’s unearned income above a threshold at the parent’s marginal rate.¹

The Kiddie Tax applies to a child who had unearned income above the threshold and fits one of these categories at year-end:⁵

Under age 18.
Age 18, and did not have earned income covering more than half of their own support.
Age 19 to 23, a full-time student, and did not have earned income covering more than half of their own support.

For 2026, the Kiddie Tax works in tiers:⁴ the first $1,350 of unearned income is tax-free, the next $1,350 is taxed at the child’s own rate (usually 10%), and anything above $2,700 is taxed at the parent’s marginal rate, which can run as high as 37%. The tax is calculated on Form 8615 and reported on the child’s own return. The liability belongs to the child, even though the parent’s bracket is used.⁵

If you make the Form 8814 election instead, the same tiered rates apply, but the income flows through your return rather than the child’s. That is the practical choice the election represents: file a second return and use Form 8615, or absorb the income (and the AGI hit) on your own return.

Dependency Is a Separate Question From Filing

A common mix-up: parents assume that if a child files their own return, the child can no longer be claimed as a dependent. That is not how it works. A child can file their own return and still be your dependent, as long as they meet the qualifying child or qualifying relative test.⁶

The qualifying child test requires the child to be under 19 at year-end (or under 24 if a full-time student), to have lived with you for more than half the year, and to not have provided more than half of their own support.⁶ A child who misses that test might still qualify as a qualifying relative, but their 2026 gross income must be below $5,300.⁴

Dependency is what makes you eligible for the child tax credit and other family tax benefits.⁷ Your child’s filing obligation is a separate matter. A 17-year-old who earned $8,000 at a part-time job files their own return and checks the box indicating someone else can claim them. You still claim them on yours.

Don’t Forget the State Return

Federal rules are only part of the picture. Most states with an income tax set their own filing thresholds for dependents, and those thresholds are often lower than the federal ones. Some states require a return from any dependent with income above a few hundred dollars. Check your state tax agency for the specific rules. A child who owes nothing federally may still owe state tax, or need to file a state return to recover state withholding.

1
Internal Revenue Service. Topic No. 553, Tax on a Childs Investment and Other Unearned Income (Kiddie Tax)
2
Internal Revenue Service. Instructions for Form 8814
3
U.S. Department of Education’s Federal Student Aid. 2025-26 Student Aid Index (SAI) and Pell Grant Eligibility Guide
4
Internal Revenue Service. Rev. Proc. 2025-32
5
Internal Revenue Service. 2025 Instructions for Form 8615 Tax for Certain Children Who Have Unearned Income
6
Internal Revenue Service. Publication 501 (2025), Dependents, Standard Deduction, and Filing Information
7
Internal Revenue Service. Child Tax Credit