What Is Form 8814? Parent’s Election to Report a Child’s Income

Form 8814 is the IRS form a parent uses to report a child’s interest, dividends, and capital gain distributions on the parent’s own tax return, so the child does not have to file a separate return. For the 2026 tax year, the child’s gross income must be more than $1,350 and less than $13,500, and it must come only from interest, ordinary dividends, and capital gain distributions.¹ The election is convenient, but it can raise your adjusted gross income, shrink credits you were counting on, and tax a slice of the child’s qualified dividends at a higher rate than a separate return would. Whether it saves you effort or costs you money depends on the size and makeup of the child’s account.

Who Can Use Form 8814

Every one of these conditions has to be met. Missing one means the child needs their own return.

The child is under 18 at year-end. Children who are 18, or 19 through 23 and full-time students, also qualify if their earned income was less than half of their own support.²
The child’s income is only interest, ordinary dividends, and capital gain distributions. Alaska Permanent Fund dividends count. Any wages or other earned income disqualifies the election.³
Gross income is more than $1,350 and less than $13,500 for 2026.¹
No estimated tax payments were made in the child’s name and taxpayer ID, and no amounts were withheld under the backup withholding rules of Section 3406.⁴
At least one of the child’s parents is alive at year-end, and the child does not file a joint return.

One point worth flagging, because it trips people up: the disqualifying withholding is backup withholding specifically, the kind a bank applies when it doesn’t have a correct taxpayer ID on file. Ordinary federal income tax withholding on a child’s account, if it somehow happened, does not by itself close off the election.

Which Parent Files It

If you file jointly, attach Form 8814 to the joint return and you’re done. Beyond that, the rules get specific:⁵

Married filing separately: the parent with the higher taxable income makes the election.
Divorced or legally separated: the custodial parent (the one the child lived with for most of the year) makes the election. If that parent has remarried and files jointly, the form attaches to that joint return.
Never married and living together: the higher-income parent files it.
Never married and living apart: the custodial-parent rule applies.

This isn’t just paperwork. Because everything above $2,700 gets taxed at the reporting parent’s marginal rate, filing it on the wrong return can change what you owe.

How the Tax Is Calculated

Form 8814 splits the child’s unearned income into three slices:⁵

The first $1,350 is not taxed. It matches the dependent standard deduction and drops out of the calculation.
The next $1,350, from $1,350 to $2,700, is taxed at a flat 10%, whatever your bracket. The most this slice can produce is $135 in tax.
Anything above $2,700 gets added to your taxable income and taxed at your marginal rate, which can run from 10% to 37%.⁶

The middle slice is where the election can quietly cost you. That flat 10% hits everything in the $1,350 to $2,700 range, including qualified dividends and capital gain distributions that could have been taxed at 0% on the child’s own return. The IRS instructions say so directly: making the election can cost up to $135 more in tax when the child’s income includes qualified dividends or capital gains.⁵

Above $2,700, the preferential treatment comes back. Form 8814 routes qualified dividends to your Form 1040, line 3a, and capital gain distributions to Schedule D, line 13 (or Form 1040, line 7a if you aren’t otherwise filing Schedule D), so those amounts get the same capital gains rates as your other investment income.⁵

What It Does to Your Own Return

Reporting the child’s income on your return raises your AGI, and the effects reach further than most parents expect. The IRS instructions warn that the higher AGI from this election can reduce or eliminate:⁵

The child tax credit, which phases out as AGI rises.
The earned income credit, if you’re anywhere near the EITC phaseout.
The student loan interest deduction, which starts phasing out at fairly modest incomes.
The American Opportunity and Lifetime Learning education credits.

The child’s income reported here also counts for the 3.8% net investment income tax. Everything on line 12 of the form goes into your MAGI for NIIT, and all of it (except Alaska Permanent Fund dividends) counts as net investment income.⁵ For joint filers, NIIT starts at $250,000 of MAGI, so a child’s account could be what tips you across.

One narrower issue: if the child received tax-exempt interest from certain private activity bonds (box 9 of Form 1099-INT), that interest has to be included in your AMT calculation on Form 6251 when you make the election.⁷ Most children’s accounts don’t hold these bonds, but check the 1099 before assuming.

When a Separate Child Return Beats Form 8814

The alternative is filing a return for the child and using Form 8615 to calculate the kiddie tax on unearned income above $2,700.⁸ Two situations tend to favor that route.

First, if the child’s income is mostly qualified dividends or capital gain distributions, the child’s own return can apply the 0% preferential rate to income that Form 8814 taxes at 10%. A child with $2,700 of qualified dividends and nothing else could save the full $135 by filing separately.

Second, a separate return keeps the income off your AGI entirely, so your credits and deductions aren’t touched.

The trade-off is another return to prepare, federal and possibly state. For a child with $1,500 in bank interest, Form 8814 is almost certainly worth the small tax cost. For a custodial brokerage account with $10,000 in qualified dividends, running the numbers both ways is worth the hour.

Form 8814 also has stricter rules. Any earned income, any income type outside interest, dividends, and capital gains, or gross income of $13,500 or more, and the election is off the table. A separate return with Form 8615 becomes the only option.⁸

What You Need to Fill It Out

Gather these for each child you’re reporting:

The child’s Social Security number.
Form 1099-INT for interest. Box 1 goes on line 1a of Form 8814.⁵
Form 1099-DIV for dividends and capital gain distributions. Ordinary dividends (box 1a) go on line 2a, qualified dividends (box 1b) on line 2b, and capital gain distributions (box 2a) on line 3.
Records of any Alaska Permanent Fund dividends, reported with the child’s other dividends.

The form totals the child’s income, drops the first $1,350, applies 10% to the next $1,350, and sends the remainder to Schedule 1, line 8z of your Form 1040. Write “Form 8814” next to that line so the IRS can trace where the income came from.⁹

Filing and Multiple Children

Attach the completed Form 8814 to your Form 1040, 1040-SR, or 1040-NR and file by the regular due date, including extensions.⁵ Tax software routes the amounts automatically once you enter the 1099 data.

You need a separate Form 8814 for each child. You can also mix approaches: elect for one child and file a separate return for another if the math works out that way. When you file more than one, add the line 12 amounts together for Schedule 1, line 8z, and combine the line 15 tax amounts on Form 1040, line 16.⁵

Once the return is processed, the child is treated as having no gross income for the year and doesn’t have to file separately.³ Keep copies of the 1099s and the completed Form 8814 for at least three years.

1
Internal Revenue Service. Rev. Proc. 2025-32
2
Office of the Law Revision Counsel. 26 USC 1 Tax Imposed – Section: (g)(2)
3
Office of the Law Revision Counsel. 26 USC 1 Tax Imposed – Section: (g)(7)(A)
4
Office of the Law Revision Counsel. 26 USC 1 Tax Imposed – Section: (g)(7)(A)(iii)
5
Internal Revenue Service. 2025 Instructions for Form 8814 – Parents Election To Report Childs Interest and Dividends
6
Internal Revenue Service. Federal Income Tax Rates and Brackets
7
Internal Revenue Service. Instructions for Form 8814 (2025)
8
Internal Revenue Service. Topic No. 553, Tax on a Childs Investment and Other Unearned Income (Kiddie Tax)
9
Internal Revenue Service. Form 8814 – Parents Election To Report Childs Interest and Dividends