Form 8814 - Parents' Election To Report Child'S Interest And Dividends - 2012 Page 3
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Form 8814 (2012)
Page
General Instructions
If your child received qualified dividends or capital gain
distributions, you may pay up to $95 more tax if you make this
Future developments. For the latest information about
election instead of filing a separate tax return for the child. This is
developments related to Form 8814 and its instructions, such as
because the tax rate on the child’s income between $950 and
legislation enacted after they were published, go to
$1,900 is 10% if you make this election. However, if you file a
form8814.
separate return for the child, the tax rate may be as low as 0% (zero
percent) because of the preferential tax rates for qualified dividends
Purpose of Form
and capital gain distributions.
Use this form if you elect to report your child’s income on your
If any of the above apply to your child, first figure the tax on your
return. If you do, your child will not have to file a return. You can
child’s income as if he or she is filing a return. Next, figure the tax as
make this election if your child meets all of the following conditions.
if you are electing to report your child’s income on your return.
• The child was under age 19 (or under age 24 if a full-time student)
Then, compare the methods to determine which results in the lower
at the end of 2012. “Student” is defined below.
tax.
• The child’s only income was from interest and dividends, including
Alternative minimum tax. If your child received tax-exempt interest
capital gain distributions and Alaska Permanent Fund dividends.
(or exempt-interest dividends paid by a regulated investment
company) from certain private activity bonds, you must take this
• The child’s gross income for 2012 was less than $9,500.
into account in determining if you owe the alternative minimum tax.
• The child is required to file a 2012 return.
This type of interest should be shown in box 9 of Form 1099-INT.
• The child does not file a joint return for 2012.
See Form 6251, Alternative Minimum Tax—Individuals, and its
instructions for details.
• There were no estimated tax payments for the child for 2012
(including any overpayment of tax from his or her 2011 return
Investment interest expense. Your child’s income (other than
applied to 2012 estimated tax).
qualified dividends, Alaska Permanent Fund dividends, and capital
gain distributions) that you report on your return is considered to be
• There was no federal income tax withheld from the child’s
your investment income for purposes of figuring your investment
income.
interest expense deduction. If your child received qualified
You must also qualify. See Parents who qualify to make the
dividends, Alaska Permanent Fund dividends, or capital gain
election below.
distributions, see Pub. 550, Investment Income and Expenses, to
Student. A student is a child who for some part of each of 5
figure the amount you can treat as your investment income.
calendar months during the year was enrolled as a full-time student
Foreign accounts and trusts. You must complete Schedule B
at a school, or took a full-time, on-farm training course given by a
(Form 1040), Part III, and file it with your tax return if your child:
school or a state, county, or local government agency. A school
1. Had a foreign financial account, or
includes a technical, trade, or mechanical school. It does not
include an on-the-job training course, correspondence school, or
2. Received a distribution from, or was the grantor of, or transferor
school offering courses only through the Internet.
to, a foreign trust.
Certain January 1 birthdays. A child born on January 1, 1994, is
Enter “Form 8814” on the dotted line next to line 7a or line 8,
considered to be age 19 at the end of 2012. You cannot make this
whichever applies. Complete line 7b if applicable.
election for such a child unless the child was a full-time student.
Note. If you file Form 8814 with your income tax return to report
A child born on January 1, 1989, is considered to be age 24 at the
your child's foreign financial account, you have an interest in the
end of 2012. You cannot make this election for such a child.
assets from that account and may be required to file Form 8938,
How to make the election. To make the election, complete and
Statement of Specified Foreign Financial Assets. Check
attach Form(s) 8814 to your tax return and file your return by the
form8938 for details.
due date (including extensions). A separate Form 8814 must be filed
Change of address. If your child filed a return for a previous year
for each child whose income you choose to report.
and the address shown on the last return filed is not your child’s
Parents who qualify to make the election. You qualify to make
current address, be sure to notify the IRS, in writing, of the new
this election if you file Form 1040 or Form 1040NR and any of the
address. To do this, use Form 8822, Change of Address.
following apply.
Additional information. See Pub. 929, Tax Rules for Children and
• You are filing a joint return for 2012 with the child’s other parent.
Dependents, for more details.
• You and the child’s other parent were married to each other but
Line Instructions
file separate returns for 2012 and you had the higher taxable
income.
Name and social security number. If you are filing a joint return,
You were unmarried, treated as unmarried for federal income tax
enter both names but enter the social security number of the person
purposes, or separated from the child’s other parent by a divorce or
whose name is shown first on the return.
separate maintenance decree. The child must have lived with you
Line 1a. Enter all taxable interest income your child received in
for most of the year (you were the custodial parent). If you were the
2012. Do not include tax-exempt interest in the total for line 1a, but
custodial parent and you remarried, you can make the election on a
be sure to include it on line 1b.
joint return with your new spouse. But if you and your new spouse
If your child received, as a nominee, interest that actually belongs
do not file a joint return, you qualify to make the election only if you
to another person, enter the amount and “ND” (nominee
had higher taxable income than your new spouse.
distribution) on the dotted line next to line 1a. Do not include
Note. If you and the child’s other parent were not married but lived
amounts received as a nominee in the total for line 1a.
together during the year with the child, you qualify to make the
election only if you are the parent with the higher taxable income.
If your child had accrued interest that was paid to the seller of a
bond, amortizable bond premium (ABP) allowed as a reduction to
Tax benefits you cannot take. If you elect to report your child’s
interest income, or if any original issue discount (OID) is less than
income on your return, you cannot take certain deductions that your
the amount shown on your child’s Form 1099-OID, enter the
child could take on his or her own return such as:
nontaxable amount on the dotted line next to line 1a and “Accrued
• Additional standard deduction of $1,450 if the child is blind,
interest,” “ABP adjustment,” or “OID adjustment,” whichever
• Penalty on early withdrawal of child’s savings, and
applies. Do not include any nontaxable amounts in the total for line
1a.
• Itemized deductions such as the child’s investment expenses or
charitable contributions.
Line 1b. If your child received any tax-exempt interest income, such
as from certain state and municipal bonds, report it on line 1b.
Tax-exempt interest, including any exempt-interest dividends your
child received as a shareholder in a mutual fund or other regulated
investment company, should be shown in box 8 of Form 1099-INT.
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