IRS Pub 929: Filing, Standard Deduction, and the Kiddie Tax

IRS Publication 929 covers three questions about people who can be claimed as dependents: when the dependent has to file their own tax return, how much standard deduction they get, and how the kiddie tax applies to a child’s investment income. For the 2026 tax year, a dependent generally must file if unearned income tops $1,350 or earned income tops $16,100, and a child’s unearned income above $2,700 gets pulled into the kiddie tax calculation.¹

Publication 929 assumes the dependency question is already settled. Whether a specific person qualifies as your dependent is answered by the qualifying child and qualifying relative tests, which live in Publication 501. What follows here is what happens on the tax return once someone is a dependent.

When a Dependent Has to File a Return

Being claimed on someone else’s return does not excuse a dependent from filing their own. The thresholds turn on the type of income. Earned income means wages, salary, tips, and net self-employment earnings. Unearned income means interest, dividends, capital gains, rents, royalties, taxable Social Security, pension payments, and IRA distributions.

For 2026, a single dependent under age 65 and not blind must file a return if any of the following is true:¹

Unearned income was more than $1,350.
Earned income was more than $16,100.
Gross income was more than the larger of $1,350, or earned income (up to $15,650) plus $450.
Net self-employment earnings were $400 or more, regardless of the other thresholds.²

Dependents who are 65 or older, or blind, get higher filing thresholds because they qualify for an additional standard deduction amount.

When Filing Is Optional but Worth It

Even below these thresholds, a dependent should file if federal income tax was withheld from their paycheck. Filing is the only way to get that money refunded. The same logic applies to dependents who qualify for refundable credits like the earned income credit or the refundable portion of the American opportunity credit.³

This is what catches teenagers with summer jobs. Withholding comes out of every paycheck, total annual income lands below the filing threshold, and without a return the withheld tax simply stays with the Treasury.

The Dependent’s Standard Deduction

A dependent’s standard deduction is smaller than a regular single filer’s. For 2026 it equals the greater of:¹

$1,350, or
The dependent’s earned income plus $450.

The deduction is capped at $16,100, which is the regular single-filer amount for 2026.⁴

How this plays out:

A dependent with $3,000 in dividends and no job gets a $1,350 deduction. That leaves $1,650 exposed to tax.
A dependent earning $8,000 from a part-time job gets an $8,450 deduction ($8,000 + $450), which shelters all the wages.
A dependent earning $20,000 gets the full $16,100 cap, the same amount any single filer would get.

The formula ties the deduction to earned income on purpose. It prevents parents from shifting a large chunk of investment income to a child and covering it with a full standard deduction.

The Kiddie Tax

The kiddie tax exists so parents can’t move investments into a child’s name and have the income taxed at the child’s lower rate. Above a threshold, a child’s unearned income is taxed at the parent’s marginal rate instead.

For 2026, the split works like this on a child’s unearned income:¹

The first $1,350 is offset by the dependent’s standard deduction, so it’s tax-free.
The next $1,350 is taxed at the child’s own rate.
Anything above $2,700 is taxed at the parent’s rate, if that rate is higher than the child’s.

Which Children Are Covered

The kiddie tax applies to a child who, at the end of the tax year, meets one of these age conditions:⁵

Under age 18.
Age 18, and the child’s earned income did not cover more than half of their own support.
A full-time student age 19 through 23, and earned income did not cover more than half of their support.

Once a child ages out, or earns enough to cover more than half their own support, investment income is taxed entirely at the child’s own rate.

What Counts as Unearned Income

The kiddie tax reaches broadly. Unearned income includes taxable interest, ordinary and qualified dividends, capital gains (including mutual fund capital gain distributions), rents, royalties, the taxable portion of Social Security or pension payments received by the child, and IRA distributions. If the child didn’t earn it through work, it counts.⁶

Reporting the Kiddie Tax: Two Choices

There are two ways to report a child’s unearned income when it triggers the kiddie tax. The default is a return in the child’s name with Form 8615. In narrower circumstances, the parent can absorb the income onto their own return with Form 8814.

Form 8615: The Child Files

When the child’s unearned income exceeds $2,700, the child files a return with Form 8615 attached. The form calculates the tax on the child’s net unearned income using the parent’s tax rate. This method is required any time the child has earned income or doesn’t qualify for the parent’s election.⁵

Form 8615 needs the parent’s taxable income and filing status to work. If the parent hasn’t filed by the child’s deadline, the child should request an extension on Form 4868 rather than estimate.⁵

Form 8814: The Parent Elects

If a child’s only income is interest and dividends (including Alaska Permanent Fund dividends), the parent can elect to report that income on their own return with Form 8814. For 2026, the election is available only when the child’s gross income is more than $1,350 and less than $13,500.⁷

Form 8814 spares the child from filing separately. The tradeoff is that the child’s income raises the parent’s adjusted gross income, which can shrink credits and deductions that phase out with AGI. It can also apply a higher rate to the child’s investment income than Form 8615 would produce. When the amounts involved are meaningful, running the calculation both ways before choosing is worth the time.⁷

1
Internal Revenue Service. Rev. Proc. 2025-32
2
Internal Revenue Service. Check if You Need to File a Tax Return
3
Internal Revenue Service. Publication 501 (2025), Dependents, Standard Deduction, and Filing Information
4
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
5
Internal Revenue Service. Instructions for Form 8615
6
Internal Revenue Service. Topic No. 553, Tax on a Child’s Investment and Other Unearned Income (Kiddie Tax)
7
Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends