Publication 929 (2018), Tax Rules for Children and Dependents

For use in preparing 2018 Returns


Publication 929 - Introductory Material

What’s New

Standard deduction amounts increased. For 2018, the standard deduction amount has been increased for all filers. The amounts are:

  • Single or Married filing separately — $12,000,

  • Married filing jointly or Qualifying Widow(er) — $24,000,

  • Head of household — $18,000.

For married taxpayers who are age 65 or over or blind, the standard deduction is increased an additional amount of $1,300 ($1,600 if head of household or single).

Personal exemption suspended. For 2018, you can't claim a personal exemption deduction for yourself, your spouse, or your dependents.

Miscellaneous itemized deductions suspended. The deduction of miscellaneous itemized deductions is suspended for tax years 2018 through 2025 by the Tax Cuts and Jobs Act. See Itemized deductions , later.

Change in tax rates. The Tax Cuts and Jobs Act has modified the tax rates and brackets you will use to figure the tax on your 2018 unearned income. Your tax rate is no longer affected by the tax situation of your parents or the unearned income of any siblings. Instead, all net unearned income over a threshold amount of $2,100 for 2018 is taxed using the brackets and rates for trusts and estates. See the Form 8615 Instructions.

New credit for other dependents. A new credit of up to $500 is available for each dependent who doesn't qualify for the child tax credit.

Social security number (SSN) required for child tax credit. Your child must have an SSN valid for employment issued before the due date of your 2018 return (including extensions) to be claimed as a qualifying child for the child tax credit or the additional child tax credit. If your child doesn’t qualify you for the child tax credit but has a taxpayer identification number issued on or before the due date of your 2018 return (including extensions), you may be able to claim the new credit for other dependents for that child.

Forms 1040A and 1040-EZ no longer available. Forms 1040A and 1040-EZ aren't available to file your 2018 taxes. If you used one of those forms in the past, you will now file Form 1040.

Future Developments

For the latest information about developments related to Publication 929, such as legislation enacted after this publication was published, go to IRS.gov/Pub929.

Reminders

Social security number (SSN). Dependents who are required to file a tax return must have an SSN. To apply for an SSN, file Form SS-5 with the Social Security Administration. You can go to the website SSA.gov for more information.

Individual taxpayer identification number (ITIN). The IRS will issue an ITIN to a nonresident or resident alien who doesn’t have and isn’t eligible to get an SSN. To apply for an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. It takes 6-10 weeks to get an ITIN. The ITIN is entered wherever an SSN is requested on a tax return. If you are a nonresident alien applying for an ITIN to file a tax return, you generally must attach your original, completed return to Form W-7 to get an ITIN. See the Form W-7 instructions for more information.An ITIN is for tax use only. It doesn’t entitle you to social security benefits or change your employment or immigration status under U.S. law. If you were assigned an ITIN before January 1, 2013, or if you have an ITIN that you haven't included on a tax return in the last 3 consecutive years, you may need to renew it. For more information see the instructions for Form W-7.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 800-THE-LOST (800-843-5678) if you recognize a child.

Net Investment Income Tax. A child whose tax is figured on Form 8615 may be subject to the Net Investment Income Tax (NIIT). See the instructions for Form 8960 for more information.

Introduction

Part 1 of this publication explains the filing requirements and other tax information for individuals who can be claimed as a dependent on another person's tax return.
Part 2 explains how to report and figure the tax on unearned income of certain children (whether or not they can be claimed as dependents).

Definitions.

Many of the terms used in this publication, such as "dependent," "earned income," and "unearned income," are defined in the Glossary at the back of this publication.

Comments and suggestions.

We welcome your comments about this publication and your suggestions for future editions.

You can send us comments through IRS.gov/FormComments. Or you can write to:

Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224

 

Although we can’t respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications.

Ordering forms and publications.

Visit IRS.gov/FormsPubs to download forms and publications. Otherwise, you can go to IRS.gov/OrderForms to order current and prior-year forms and instructions. Your order should arrive within 10 business days.

Tax questions.

If you have a tax question not answered by this publication, check IRS.gov and How To Get Tax Help at the end of this publication.

Useful Items - You may want to see:

Publication

  • 501 Dependents, Standard Deduction, and Filing Information

  • 505 Tax Withholding and Estimated Tax

  • 550 Investment Income and Expenses

Form (and Instructions)

  • W-4 Employee's Withholding Allowance Certificate

  • 8615 Tax for Certain Children Who Have Unearned Income

  • 8814 Parents' Election To Report Child's Interest and Dividends

See How To Get Tax Help near the end of this publication for information about getting these publications and forms.

Publication 929 - Main Content

Part 1. Rules for All Dependents

This part of the publication discusses the filing requirements for dependents, who is responsible for a child's return, how to figure a dependent's standard deduction and whether a dependent can claim exemption from federal income tax withholding.

Filing Requirements

Whether a dependent has to file a return generally depends on the amount of the dependent's earned and unearned income and whether the dependent is married, is age 65 or older, or is blind.

This is an Image: caution.gif

 

A dependent may have to file a return even if his or her income is less than the amount that would normally require a return. See Other Filing Requirements, later.

The following sections apply to dependents with:

  • Earned income only,

  • Unearned income only, and

  • Both earned and unearned income.


To find out whether a dependent must file, read the section that applies, or use Table 1.

Table 1. 2018 Filing Requirements for Dependents

If your parent (or someone else) can claim you as a dependent, use this table to see if you must file a return.  
See the definitions of "dependent," "earned income," "unearned income," and "gross income" in the Glossary.  
Single dependents—Were you either age 65 or older or blind?  
This is an Image: box.gif
 
  No. You must file a return if any of the following apply.    
 
  • Your unearned income was over $1,050.

  • Your earned income was over $12,000.

  • Your gross income was more than the larger of—

 
   
  • $1,050, or

  • Your earned income (up to $11,650) plus $350.

     
This is an Image: box.gif
 
  Yes. You must file a return if any of the following apply.  
 
  • Your unearned income was over $2,650 ($4,250 if 65 or older and blind),

  • Your earned income was over $13,600 ($15,200 if 65 or older and blind),

  • Your gross income was more than the larger of—

 
   
  • $2,650 ($4,250 if 65 or older and blind), or

  • Your earned income (up to $11,650) plus $1,950 ($3,550 if 65 or older and blind).

     
Married dependents—Were you either age 65 or older or blind?  
This is an Image: box.gif
 
  No. You must file a return if any of the following apply.    
 
  • Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.

  • Your unearned income was over $1,050.

  • Your earned income was over $12,000.

  • Your gross income was more than the larger of—

 
   
  • $1,050, or

  • Your earned income (up to $11,650) plus $350.

   
This is an Image: box.gif
 
  Yes. You must file a return if any of the following apply.    
 
  • Your gross income was at least $5 and your spouse files a separate return and itemizes deductions,

  • Your unearned income was over $2,350 ($3,650 if 65 or older and blind),

  • Your earned income was over $13,300 ($14,600 if 65 or older and blind),

  • Your gross income was more than the larger of—

 
   
  • $2,350 ($3,650 if 65 or older and blind), or

  • Your earned income (up to $11,650) plus $1,650 ($2,950 if 65 or older and blind).

     

Earned Income Only

A dependent whose gross income is only earned income must file a return if the gross income is more than the amount listed in the following table.

Marital Status Amount
Single  
Under 65 and not blind $12,000
Either 65 or older or blind $13,600
65 or older and blind $15,200
Married*  
Under 65 and not blind $12,000
Either 65 or older or blind $13,300
65 or older and blind $14,600
*If a dependent's spouse itemizes deductions on a separate return, the dependent must file a return if the dependent has $5 or more of gross income (earned and/or unearned).

 

Example.

William is 16. His mother claims him as a dependent on her income tax return. He worked part time on weekends during the school year and full time during the summer. He earned $12,500 in wages. He didn't have any unearned income.

He must file a tax return because he has earned income only and his gross income is more than $12,000. If he is blind, he doesn't have to file a return because his gross income isn't more than $13,600.

Unearned Income Only

A dependent whose gross income is only unearned income must file a return if the gross income is more than the amount listed in the following table.

Marital Status Amount
Single  
Under 65 and not blind $1,050
Either 65 or older or blind $2,650
65 or older and blind $4,250
Married*  
Under 65 and not blind $1,050
Either 65 or older or blind $2,350
65 or older and blind $3,650
*If a dependent's spouse itemizes deductions on a separate return, the dependent must file a return if the dependent has $5 or more of gross income (earned and/or unearned).

 

Example.

Sarah is 18 and single. Her parents can claim her as a dependent on their income tax return. She received $1,970 of taxable interest and dividend income. She didn't work during the year.

She must file a tax return because she has unearned income only and her gross income is more than $1,050. If she is blind, she doesn't have to file a return because she has unearned income only and her gross income isn't more than $2,650.

Election to report child's unearned income on parent's return.

A parent of a child under age 19 (or under age 24 if a full-time student) may be able to elect to include the child's interest and dividend income on the parent's return. See Parent's Election To Report Child's Interest and Dividends in Part 2. If the parent makes this election, the child doesn’t have to file a return.

Both Earned and Unearned Income

This is an Image: pencil.gif

 

A dependent who has both earned and unearned income generally must file a return if the dependent's gross income is more than line 5 of the following worksheet.

 

Filing Requirement Worksheet
for Most Dependents
1. Enter dependent's earned income plus $350    
2. Minimum amount   $1,050
3. Compare lines 1 and 2. Enter the larger amount    
4. Maximum amount   12,000
5. Compare lines 3 and 4. Enter the smaller amount    
6. Enter the dependent's gross income. If line 6 is more than line 5, the dependent must file an income tax return. If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more.    
 

Example 1.

Joe is 20, single, not blind, and a full-time college student. He doesn’t provide more than half of his own support, and his parents claim him as a dependent on their income tax return. He received $200 taxable interest income and earned $2,750 from a part-time job.

He doesn't have to file a tax return because his gross income of $2,950 ($200 interest plus $2,750 in wages) isn't more than $3,100, the amount on line 5 of his filled-in (Example 1) Filing Requirement Worksheet for Most Dependents.

 

Filled-in Example 1
Filing Requirement Worksheet
for Most Dependents
1. Enter dependent's earned income plus $350   $ 3,100
2. Minimum amount   1,050
3. Compare lines 1 and 2. Enter the larger amount   3,100
4. Maximum amount   12,000
5. Compare lines 3 and 4. Enter the smaller amount   3,100
6. Enter the dependent's gross income. If line 6 is more than line 5, the dependent must file an income tax return. If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more.   $ 2,950
 

 

Example 2.

The facts are the same as in Example 1 except that Joe had $600 taxable interest income.

He must file a tax return because his gross income of $3,350 ($600 interest plus $2,750 wages) is more than $3,100, the amount on line 5 of his filled-in (Example 2) worksheet.

 

Filled-in Example 2
Filing Requirement Worksheet
for Most Dependents
1. Enter dependent's earned income plus $350   $ 3,100
2. Minimum amount   1,050
3. Compare lines 1 and 2. Enter the larger amount   3,100
4. Maximum amount   12,000
5. Compare lines 3 and 4. Enter the smaller amount   3,100
6. Enter the dependent's gross income. If line 6 is more than line 5, the dependent must file an income tax return. If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more.   $ 3,350
 

 

This is an Image: pencil.gif

 

Age 65 or older or blind. A dependent who is age 65 or older or blind must file a return if his or her gross income is more than line 7 of the following worksheet.

 

Filing Requirement Worksheet
for Dependents
Who Are Age 65 or Older or Blind
1. Enter dependent's earned income plus $350    
2. Minimum amount   $1,050
3. Compare lines 1 and 2. Enter the larger amount    
4. Maximum amount   12,000
5. Compare lines 3 and 4. Enter the smaller amount    
6. Enter the amount from the following table that applies to the dependent    
  Marital Status Amount  
  Single    
    Either 65 or older or blind $1,600  
    65 or older and blind $3,200  
  Married    
    Either 65 or older or blind $1,300  
    65 or older and blind $2,600  
7. Add lines 5 and 6. Enter the total    
8. Enter the dependent's gross income. If line 8 is more than line 7, the dependent must file an income tax return. If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 8 is $5 or more    

 

Example 3.

The facts are the same as in Example 2 except that Joe is also blind. He doesn't have to file a return because his gross income of $3,350 isn’t more than $4,700, the amount on line 7 of his filled-in (Example 3) Filing Requirement Worksheet for Dependents Who Are Age 65 or Older or Blind (shown next).

 

Filled-in Example 3
Filing Requirement Worksheet
for Dependents
Who Are Age 65 or Older or Blind
1. Enter dependent's earned income plus $350   $3,100
2. Minimum amount   1,050
3. Compare lines 1 and 2. Enter the larger amount   3,100
4. Maximum amount   12,000
5. Compare lines 3 and 4. Enter the smaller amount   3,100
6. Enter the amount from the following table that applies to the dependent   1,600
  Marital Status Amount  
  Single    
    Either 65 or older or blind $1,600  
    65 or older and blind $3,200  
  Married    
    Either 65 or older or blind $1,300  
    65 or older and blind $2,600  
7. Add lines 5 and 6. Enter the total   4,700
8. Enter the dependent's gross income. If line 8 is more than line 7, the dependent must file an income tax return. If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 8 is $5 or more   $3,350

 

Other Filing Requirements

Some dependents may have to file a tax return even if their income is less than the amount that would normally require them to file a return.

A dependent must file a tax return if he or she owes any other taxes, such as:

  • Social security and Medicare taxes on tips not reported to his or her employer or on wages received from an employer who didn’t withhold these taxes,

  • Uncollected social security and Medicare or railroad retirement taxes on tips reported to his or her employer or on group-term life insurance,

  • Alternative minimum tax,

  • Additional tax on a health savings account from Form 8889, Part III,

  • Recapture taxes, such as the tax from recapture of an education credit, or

  • Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. But if the dependent is filing a return only because of this tax, the dependent can file Form 5329 by itself.

 

A dependent must also file a tax return if he or she:

  • Had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes, or

  • Had net earnings from self-employment of at least $400.

 

Spouse itemizes.

A dependent must file a return if the dependent's spouse itemizes deductions on a separate return and the dependent has $5 or more of gross income (earned and/or unearned).

Should a Return Be Filed Even If Not Required?

Even if a dependent doesn’t meet any of the filing requirements discussed earlier, he or she should file a tax return if either of the following applies.

  • Income tax was withheld from his or her income.

  • He or she qualifies for the earned income credit. See the tax return instructions to find out who qualifies for this credit.


By filing a return, the dependent can get a refund.

Responsibility for Child's Return

Generally, a child is responsible for filing his or her own tax return and for paying any tax, penalties, or interest on that return. If a child can’t file his or her own return for any reason, such as age, the child's parent, guardian, or other legally responsible person must file it for the child.

Signing the child's return.

If the child can’t sign his or her return, a parent or guardian must sign the child's name followed by the words "By (signature), parent (or guardian) for minor child."

Authority of parent or guardian.

A parent or guardian who signs a return on a child's behalf can deal with the IRS on all matters connected with the return.

In general, a parent or guardian who doesn’t sign the child's return can only provide information concerning the child's return and pay the child's tax. That parent or guardian isn’t entitled to receive information from the IRS or legally bind the child to a tax liability arising from the return.

Third party designee.

A child's parent or guardian who doesn’t sign the child's return may be authorized, as a third party designee, to discuss the processing of the return with the IRS as well as provide information concerning the return. The child or the person signing the return on the child's behalf must check the "Yes" box in the "Third Party Designee" area of the return and name the parent or guardian as the designee.

If designated, a parent or guardian can respond to certain IRS notices and receive information about the processing of the return and the status of a refund or payment. This designation doesn’t authorize the parent or guardian to receive any refund check, bind the child to any tax liability, or otherwise represent the child before the IRS. See the return instructions for more information.

Designated as representative.

A parent or guardian who doesn’t sign the child's return may be designated as the child's representative by the child or the person signing the return on the child's behalf. Form 2848, Power of Attorney and Declaration of Representative, is used to designate a child's representative. See Pub. 947, Practice Before the IRS and Power of Attorney, for more information.

If designated, a parent or guardian can receive information about the child's return but can’t legally bind the child to a tax liability unless authorized to do so by the law of the state in which the child lives.

IRS notice.

If you or the child receives a notice from the IRS concerning the child's return or tax liability, you should immediately inform the IRS that the notice concerns a child. The notice will show who to contact. The IRS will try to resolve the matter with the parent(s) or guardian(s) of the child consistent with their authority.

Child's earnings.

For federal income tax purposes, amounts a child earns by performing services are included in the gross income of the child and not the gross income of the parent. This is true even if, under state law, the parent has the right to the earnings and may actually have received them.

If the child doesn’t pay the tax due on this income, the parent may be liable for the tax.

Child's expenses.

Deductions for payments that are made out of a child's earnings are the child's, even if the payments are made by the parent.

Example.

You made payments on your child's behalf that are deductible as a business expense and a charitable contribution. You made the payments out of your child's earnings. These items can be deducted only on the child's return.

Standard Deduction

The standard deduction for an individual who can be claimed as a dependent on another person's tax return is generally limited to the larger of:

  1. $1,050, or

  2. The individual's earned income plus $350, but not more than the regular standard deduction (generally $12,000).

However, the standard deduction may be higher for a dependent who:

  • Is 65 or older, or

  • Is blind.

 

Certain dependents can’t claim any standard deduction. See Standard Deduction of Zero , later.

Worksheet 1.

Use Worksheet 1 to figure the dependent's standard deduction.

Worksheet 1. Standard Deduction Worksheet for Dependents

Use this worksheet only if someone else can claim you (or your spouse, if filing jointly) as a dependent.
If you were 65 or older and/or blind, check the correct number of boxes below. Put the total number of boxes checked in box c and go to line 1.
a. You 65 or older This is an Image: box.gif
 
  Blind This is an Image: box.gif
 
 
b. Your spouse, if claiming
spouse's exemption
65 or older This is an Image: box.gif
 
  Blind This is an Image: box.gif
 
 
c. Total boxes checked This is an Image: box.gif
 
       
1. Enter your earned income* plus $350. If none, enter -0-. 1.    
2. Minimum amount.   2. $1,050  
3. Compare lines 1 and 2. Enter the larger of the two amounts here. 3.    
4. Enter on line 4 the amount shown below for your filing status.      
  • Single or Married filing separately—$12,000

  • Married filing jointly—$24,000

  • Head of household—$18,000

4.    
5. Standard deduction.        
a. Compare lines 3 and 4. Enter the smaller amount here. If under 65 and not blind, stop here. This is your standard deduction. Otherwise, go on to line 5b. 5a.    
b. If 65 or older or blind, multiply $1,600 ($1,300 if married) by the number in box c above. Enter the result here. 5b.    
c. Add lines 5a and 5b. This is your standard deduction for 2018. 5c.    
*Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also includes any amount received as a scholarship that you must include in income.  

 

Example 1.

Michael is single, age 15, and not blind. His parents can claim him as a dependent on their tax return. He has taxable interest income of $800 and wages of $150. He enters $500 (his earned income plus $350) on line 1 of Worksheet 1. On line 3, he enters $1,050, the larger of $500 or $1,050. Michael enters $12,000 on line 4. On line 5a, he enters $1,050, the smaller of $1,050 or $12,000. His standard deduction is $1,050.

Example 2.

Judy, a full-time student, is single, age 22, and not blind. Her parents can claim her as a dependent on their tax return. She has dividend income of $275 and wages of $2,500. She enters $2,850 (her earned income plus $350) on line 1 of Worksheet 1. On line 3, she enters $2,850, the larger of $2,850 or $1,050. She enters $12,000 on line 4. On line 5a, she enters $2,850 (the smaller of $2,850 or $12,000) as her standard deduction.

Example 3.

Amy, who is single, is claimed as a dependent on her parents' tax return. She is 18 years old and blind. She has taxable interest income of $1,050 and wages of $2,000. She enters $2,350 (her earned income plus $350) on line 1 of Worksheet 1. She enters $2,350 (the larger of $2,350 or $1,050) on line 3, $12,000 on line 4, and $2,350 (the smaller of $2,350 or $12,000) on line 5a. Because Amy is blind, she checks the box for blindness and enters "1" in box c at the top of Worksheet 1. She enters $1,600 (the number in box c times $1,600) on line 5b. Her standard deduction on line 5c is $3,950 ($2,350 + $1,600).

Standard Deduction of Zero

The standard deduction for the following dependents is zero.

  • A married dependent filing a separate return whose spouse itemizes deductions.

  • A dependent who files a return for a period of less than 12 months due to a change in his or her annual accounting period.

  • A nonresident or dual-status alien dependent, unless the dependent is married to a U.S. citizen or resident alien at the end of the year and chooses to be treated as a U.S. resident for the year. See Pub. 519, U.S. Tax Guide for Aliens, for information on making this choice.

     

Example.

Jennifer, who is a dependent of her parents, is entitled to file a joint return with her husband. However, her husband elects to file a separate return and itemize his deductions. Because he itemizes, Jennifer's standard deduction on her return is zero. She can, however, itemize any of her allowable deductions.

Dependent's Own Exemption

A person who can be claimed as a dependent on another taxpayer's return generally can’t claim his or her own exemption. This is true even if the other taxpayer doesn’t actually claim the exemption. However, for tax years 2018 through 2025 the deduction for personal exemptions is suspended for a taxpayer, their spouse, and their dependents.

Withholding From Wages

Employers generally withhold federal income tax, social security tax, and Medicare tax from an employee's wages. If the employee claims exemption from withholding on Form W-4, the employer won't withhold federal income tax. The exemption from withholding doesn’t apply to social security and Medicare taxes.

Conditions for exemption from withholding.

An employee can claim exemption from withholding for 2019 only if he or she meets both of the following conditions.

  1. For 2018, the employee had a right to a refund of all federal income tax withheld because he or she had no tax liability.

  2. For 2019, the employee expects a refund of all federal income tax withheld because he or she expects to have no tax liability.

 

Dependents.

An employee who is a dependent ordinarily can’t claim exemption from withholding if both of the following are true.

  • The employee's gross income will be more than $1,100, the minimum standard deduction for 2019.

  • The employee's unearned income will be more than $350.

 

Exceptions.

An employee may be able to claim exemption from withholding even if the employee is a dependent, if the employee:

  1. Is age 65 or older,

  2. Is blind, or

  3. Will claim on his or her 2019 tax return:

    1. Adjustments to income,

    2. Tax credits, or

    3. Itemized deductions.

The above exceptions don’t apply to supplemental wages greater than $1,000,000. For more information, see Exemption From Withholding in chapter 1 of Pub. 505.

Example.

Guy is 17 and a student. During the summer he works part time at a grocery store. He expects to earn about $1,200 this year. He also worked at the store last summer and received a refund of all his withheld income tax because he didn't have a tax liability. The only other income he expects during the year is $375 interest on a savings account. He expects that his parents will be able to claim him as a dependent on their tax return. He isn't blind and won’t claim adjustments to income, itemized deductions, a higher standard deduction, or tax credits on his return.

Guy can’t claim exemption from withholding when he fills out Form W-4 because his parents will be able to claim him as a dependent, his gross income will be more than $1,100 (the 2019 minimum standard deduction amount) and his unearned income will be more than $350.

Claiming exemption from withholding.

To claim exemption from withholding, an employee must enter "Exempt" in the space provided on Form W-4, line 7. The employee must complete the rest of the form, as explained in the form instructions, and give it to his or her employer.

Renewing an exemption from withholding.

An exemption from withholding is good for only 1 year. An employee must file a new Form W-4 by February 15 each year to continue the exemption.

Part 2. Tax on Unearned Income of Certain Children

The two rules that follow may affect the tax on the unearned income of certain children.

  1. If the child's interest and dividend income (including capital gain distributions) total less than $10,500, the child's parent may be able to choose to include that income on the parent's return rather than file a return for the child. (See Parent's Election To Report Child's Interest and Dividends , later.)

  2. If the child’s interest, dividends, and other unearned income total more than $2,100, the child’s income is taxed at special tax rates. (See Tax for Certain Children Who Have Unearned Income , later.)

 

For these rules, the term "child" includes a legally adopted child and a stepchild. These rules apply whether or not the child is a dependent.

These rules don’t apply if neither of the child's parents were living at the end of the year.

Which Parent's Return To Use

If a child’s parents are married to each other and file a joint return, use the joint return when electing to report the child’s interest and dividend income on their return. For other situations when the parents do not file a joint return see Parents Who Don't File a Joint Return, next.

Parents Who Don’t File a Joint Return

For parents who don’t file a joint return and are electing to report the child’s interest and dividend income on their return, the following discussions explain which parent's tax return must be used to figure the tax.

Only the parent whose tax return is used can make the election described under Parent's Election To Report Child's Interest and Dividends .

Parents are married.

If the child's parents file separate returns, use the return of the parent with the greater taxable income.

Parents not living together.

If the child's parents are married to each other but not living together, and the parent with whom the child lives (the custodial parent) is considered unmarried, use the return of the custodial parent. If the custodial parent isn’t considered unmarried, use the return of the parent with the greater taxable income.

For an explanation of when a married person living apart from his or her spouse is considered unmarried, see Head of Household in Pub. 501.

Parents are divorced.

If the child's parents are divorced or legally separated, and the parent who had custody of the child for the greater part of the year (the custodial parent) hasn’t remarried, use the return of the custodial parent.

Custodial parent remarried.

If the custodial parent has remarried, the stepparent (rather than the noncustodial parent) is treated as the child's other parent. Therefore, if the custodial parent and the stepparent file a joint return, use that joint return. Don’t use the return of the noncustodial parent.

If the custodial parent and the stepparent are married, but file separate returns, use the return of the one with the greater taxable income. If the custodial parent and the stepparent are married but not living together, the earlier discussion under Parents not living together applies.

Parents never married.

If a child's parents have never been married to each other, but lived together all year, use the return of the parent with the greater taxable income. If the parents didn’t live together all year, the rules explained earlier under Parents are divorced apply.

Widowed parent remarried.

If a widow or widower remarries, the new spouse is treated as the child's other parent. The rules explained earlier under Custodial parent remarried apply.

Parent's Election To Report Child's Interest and Dividends

You may be able to elect to include your child's interest and dividend income (including capital gain distributions) on your tax return. If you do, your child won't have to file a return.

You can make this election only if all the following conditions are met.

  • Your child was under age 19 (or under age 24 if a full-time student) at the end of the year.

  • Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends).

  • The child's gross income was less than $10,500.

  • The child is required to file a return unless you make this election.

  • The child doesn’t file a joint return for the year.

  • No estimated tax payment was made for the year, and no overpayment from the previous year (or from any amended return) was applied to this year under your child's name and social security number.

  • No federal income tax was withheld from your child's income under the backup withholding rules.

  • You are the parent whose return must be used when applying the special tax rules for children. (See Which Parent's Return To Use , earlier.)

These conditions are also shown in Figure 1.

Certain January 1 birthdays.

A child born on January 1, 2000, is considered to be age 19 at the end of 2018. You can’t make this election for such a child unless the child was a full-time student.

A child born on January 1, 1995, is considered to be age 24 at the end of 2018. You can’t make this election for such a child.

How to make the election.

Make the election by attaching Form 8814 to your Form 1040 or Form 1040NR. Attach a separate Form 8814 for each child for whom you make the election. You can make the election for one or more children and not for others.

Effect of Making the Election

The federal income tax on your child's income may be more if you make the Form 8814 election.

Rate may be higher.

If your child received qualified dividends or capital gain distributions, you may pay up to $105 more tax if you make this election instead of filing a separate tax return for the child. This is because the tax rate on the child's income between $1,050 and $2,100 is 10% if you make this election. However, if you file a 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 and capital gain distributions.

Deductions you can’t take.

By making the Form 8814 election, you can’t take any of the following deductions that the child would be entitled to on his or her return.

  • The additional standard deduction if the child is blind.

  • The deduction for a penalty on an early withdrawal of your child's savings.

  • Itemized deductions (such as your child's investment interest expenses or charitable contributions).

 

Figure 1. Can You Include Your Child's Income On Your Tax Return?

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Figure 1. Can You Include Your Child's Income On Your Tax Return?

Please click here for the text description of the image.

 

Deductible investment interest.

If you use Form 8814, your child's unearned income is considered your unearned income. To figure the limit on your deductible investment interest, add the child's unearned income to yours. However, if your child received qualified dividends, capital gain distributions, or Alaska Permanent Fund dividends, see chapter 3 of Pub. 550 for information about how to figure the limit.

Alternative minimum tax.

If your child received tax-exempt interest (or exempt-interest dividends paid by a regulated investment company) from certain private activity bonds, you must determine if that interest is a tax preference item for alternative minimum tax (AMT) purposes. If it is, you must include it with your own tax preference items when figuring your AMT. See Form 6251, Alternative Minimum Tax—Individuals, and its instructions for details.

Net Investment Income Tax.

When figuring any Net Investment Income Tax liability on Form 8960, the amount on line 12 of Form 8814 (other than Alaska Permanent Fund dividends) will increase the amount of your net investment income reported on Form 8960. See the Form 8960 instructions for more information.

Reduced deductions or credits.

If you use Form 8814, your increased adjusted gross income may reduce certain deductions or credits on your return, including the following.

  • Deduction for contributions to a traditional individual retirement arrangement (IRA).

  • Deduction for student loan interest.

  • Itemized deductions for medical expenses and casualty and theft losses.

  • Credit for child and dependent care expenses.

  • Child tax credit.

  • Education tax credits.

  • Earned income credit.

 

Penalty for underpayment of estimated tax.

If you make this election for 2018 and didn’t have enough tax withheld or pay enough estimated tax to cover the tax you owe, you may be subject to a penalty. If you plan to make this election for 2019, you may need to increase your federal income tax withholding or your estimated tax payments to avoid the penalty. See Pub. 505 for more information.

Figuring Child's Income

Use Form 8814, Part I, to figure your child's interest and dividend income to report on your return. Only the amount over $2,100 is added to your income. The amount over $2,100 is shown on Form 8814, line 6. Unless the child's income includes qualified dividends or capital gain distributions (discussed next), the same amount is shown on Form 8814, line 12. Include the amount from Form 8814, line 12, on Schedule 1 (Form 1040), line 21; or Form 1040NR, line 21. If you file more than one Form 8814, include the total amounts from line 12 of all your Forms 8814 on Schedule 1 (Form 1040), line 21; or Form 1040NR, line 21. On the dotted line next to Schedule 1 (Form 1040), line 21; or Form 1040NR, line 21, enter "Form 8814" and the total of the Form 8814, line 12 amounts.

Note.

The tax on the first $2,100 is figured on Form 8814, Part II. See Figuring Additional Tax , later.

Qualified dividends.

Enter on Form 8814, line 2a, any ordinary dividends your child received. This amount may include qualified dividends. Qualified dividends are those dividends reported on Form 1040, line 3a; or Form 1040NR, line 10b, and are eligible for lower tax rates that apply to a net capital gain. For detailed information about qualified dividends, see Pub. 550.

If your child received qualified dividends, the amount of these dividends that is added to your income must be reported on Form 1040, lines 3a and 3b; or Form 1040NR, lines 10a and 10b. You don’t include these dividends on Form 8814, line 12; or on Schedule 1 (Form 1040), line 21; or Form 1040NR, line 21.

Enter the child's qualified dividends on Form 8814, line 2b. But don’t include this amount on Form 1040, lines 3a and 3b; or Form 1040NR, lines 10a and 10b. Instead, include the amount from Form 8814, line 9, on Form 1040, lines 3a and 3b; or Form 1040NR, lines 10a and 10b. (The amount on Form 8814, line 9, may be less than the amount on Form 8814, line 2b, because lines 7 through 12 of the form divide the $2,100 base amount on Form 8814, line 5, between the child's qualified dividends, capital gain distributions, and other interest and dividend income, reducing each of those amounts.)

Capital gain distributions.

Enter on Form 8814, line 3, any capital gain distributions your child received. The amount of these distributions that is added to your income must be reported on Schedule D (Form 1040), line 13, or, if you aren’t required to file Schedule D, on Schedule 1 (Form 1040), line 13; or Form 1040NR, line 14. You don’t include it on Form 8814, line 12; or on Schedule 1 (Form 1040), line 21; or Form 1040NR, line 21.

Include the amount from Form 8814, line 10, on Schedule D, line 13; Schedule 1 (Form 1040), line 13; or Form 1040NR, line 14, whichever applies. (The amount on Form 8814, line 10, may be less than the amount on Form 8814, line 3, because lines 7 through 12 of the form divide the $2,100 base amount on Form 8814, line 5, between the child's qualified dividends, capital gain distributions, and other interest and dividend income, reducing each of those amounts.)

Collectibles (28% rate) gain.

If any of the child's capital gain distributions are reported on Form 1099-DIV as collectibles (28% rate) gain, you must determine how much to also include on line 4 of the 28% Rate Gain Worksheet, in the Instructions for Schedule D, line 18. Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. The numerator is the part of the child's total capital gain distribution that is collectibles (28% rate) gain. The denominator is the child's total capital gain distribution. Enter the result on line 4 of the 28% Rate Gain Worksheet.

Unrecaptured section 1250 gain.

If any of the child's capital gain distributions are reported on Form 1099-DIV as unrecaptured section 1250 gain, you must determine how much to include on line 11 of the Unrecaptured Section 1250 Gain Worksheet in the Instructions for Schedule D, line 19. Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. The numerator is the part of the child's total capital gain distribution that is unrecaptured section 1250 gain. The denominator is the child's total capital gain distribution. Enter the result on the Unrecaptured Section 1250 Gain Worksheet, line 11.

Section 1202 gain.

If any of the child's capital gain distributions are reported as section 1202 gain (gain on qualified small business stock) on Form 1099-DIV, part or all of that gain may be eligible for the section 1202 exclusion. (For information about the exclusion, see chapter 4 of Pub. 550.) To figure that part, multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. The numerator is the part of the child's total capital gain distribution that is section 1202 gain. The denominator is the child's total capital gain distribution. Your section 1202 exclusion is generally 50% of the result, but may be subject to a limit. In some cases, the exclusion is more than 50%. See the Instructions for Schedule D for details and information on how to report the exclusion amount.

Example.

Fred is 6 years old. In 2018, he received dividend income of $2,300, which included $1,725 of ordinary dividends and a $575 capital gain distribution from a mutual fund. (None of the distributions were reported on Form 1099-DIV as unrecaptured section 1250 gain, section 1202 gain, or collectibles (28% rate) gain.) All of the ordinary dividends are qualified dividends. He has no other income and isn’t subject to backup withholding. No estimated tax payments were made under his name and social security number.

Fred's parents elect to include Fred's income on their tax return instead of filing a return for him.

They figure the amount to report on Form 1040, lines 3a and 3b, the amount to report on their Schedule D, line 13, and the amount to report on Schedule 1 (Form 1040), line 21, as follows.

They leave lines 1a and 1b of Form 8814 blank because Fred doesn’t have any interest income. They enter his ordinary dividends of $1,725 on lines 2a and 2b because all of Fred's ordinary dividends are qualified dividends. They enter the amount of Fred's capital gain distributions, $575, on line 3. Next, they add the amounts on lines 1a, 2a, and 3 and enter the result, $2,300, on line 4.

They subtract the base amount on line 5, $2,100, from the amount on line 4, $2,300, and enter the result, $200, on line 6. This is the total amount from Form 8814 to be reported on their return. Next, they figure how much of this amount is qualified dividends and how much is capital gain distributions.

  • They divide the amount on line 2b, $1,725, by the amount on line 4, $2,300. They enter the result, 0.75, on line 7.

  • They divide the amount on line 3, $575, by the amount on line 4, $2,300. They enter the result, 0.25, on line 8.

  • They multiply the amount on line 6, $200, by the decimal on line 7, 0.75, and enter the result, $150, on line 9.

  • They multiply the amount on line 6, $200, by the decimal on line 8, 0.25, and enter the result, $50, on line 10.

  • They include the amount from line 9, $150, on lines 3a and 3b of their Form 1040 and enter "Form 8814 – $150" on the dotted lines next to lines 3a and 3b. They include the amount from line 10, $50, on line 13 of their Schedule D (Form 1040) and enter "Form 8814 – $50" on the dotted line next to Schedule D, line 13.

 

They enter $200 ($150 + $50) on line 11 and -0- ($200 – $200) on line 12. Because the amount on line 12 is -0-, they don’t include any amount from Form 8814 on their Schedule 1 (Form 1040), line 21.

Figuring Additional Tax

Use Form 8814, Part II, to figure the tax on the $2,100 of your child's interest and dividends that you don’t include in your income. This tax is added to the tax figured on your income.

This additional tax is the smaller of:

  1. 10% x (your child's gross income − $1,050), or

  2. $105.

 

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Include the amount from line 15 of all your Forms 8814 in the total on Form 1040, line 11 or Form 1040NR, line 42. Check box 1 on Form 1040, line 11 or check box a on Form 1040NR, line 42.

Tax for Certain Children Who Have Unearned Income

If your child's interest, dividends, and other unearned income total more than $2,100, and you don't or can't use Form 8814 to include your child's income on your return, your child will use Form 8615 to figure their tax. Attach the completed Form 8615 to your child's Form 1040 or Form 1040NR.

Change in tax rates.

The Tax Cuts and Jobs Act has modified the tax rates and brackets that your child will use to figure the tax on their 2018 unearned income. Your child’s tax rate is no longer affected by your tax situation or the unearned income of any siblings. Instead, all of your child’s net unearned income over a threshold amount of $2,100 for 2018 is taxed using the brackets and rates for estates and trusts.

When Form 8615 must be filed.

Your child must file Form 8615 if all of the following are true.

  1. Their unearned income was more than $2,100.

  2. They are required to file a return for 2018.

  3. They were either:

    1. Under age 18 at the end of the year,

    2. Age 18 at the end of the year and didn’t have earned income that was more than half of his or her support, or

    3. A full-time student at least age 19 and under age 24 at the end of 2018 and didn’t have earned income that was more than half of his or her support.

  4. At least one of their parents was alive at the end of 2018.

  5. They don’t file a joint return for 2018.

These conditions are also shown in Figure 2.

Certain January 1 birthdays.

Use the following chart to determine whether certain children with January 1 birthdays meet condition 3 under When Form 8615 must be filed.

IF your child was born on... THEN, at the end of 2018, your child is considered to be...
January 1, 2001 18*
January 1, 2000 19**
January 1, 1995 24***
*Your child isn’t under age 18. Your child meets condition 3 only if your child didn’t have earned income that was more than half of his or her support.
**Your child meets condition 3 only if your child was a full-time student who didn’t have earned income that was more than half of his or her support.
***Don’t use Form 8615 for your child.

 

Providing Parental Information (Form 8615, Lines A and B)

On Form 8615, lines A and B, enter the parent's name and social security number.

Step 1. Figuring Your Child's Net Unearned Income (Form 8615, Part I)

The first step in figuring your child’s tax using Form 8615 is to figure your child’s net unearned income. To do that, use Form 8615, Part I.

Line 1 (Unearned Income)

If your child had no earned income, enter on this line the adjusted gross income shown on your child’s return. Adjusted gross income is shown on Form 1040, line 7; or Form 1040NR, line 36. Form 1040NR-EZ can’t be used if Form 8615 must be filed.

If your child had earned income, figure the amount to enter on Form 8615, line 1, by using the worksheet in the instructions for the form.

This is an Image: pencil.gif

 

However, use the following worksheet if your child:

  • has excluded any foreign earned income,

  • deducted a loss from self-employment, or

  • has a net operating loss from another year.

 

 

Alternate Worksheet
for Form 8615, Line 1
A. Enter the amount from your child’s Form 1040, line 6; or Form 1040NR, line 23  
B. Enter the total of any net loss
from self-employment, any net operating loss deduction, any foreign earned income exclusion, and any foreign housing exclusion from your child’s Form 1040 or Form 1040NR. Enter this total as a positive number (greater than zero)
 
C. Add line A and line B and
enter the total
 
D. Enter your child’s earned income plus any amount from your child’s Schedule 1 (Form 1040), line 30; or your child’s Form 1040NR, line 30  
  Generally, your child’s earned income is the total of the amounts reported on Form 1040, line 1; Schedule 1 (Form 1040), lines 12 and 18; (if Schedule 1 (Form 1040), line 12 or 18 is a loss, use zero) or Form 1040NR, lines 8, 13, and 19 (if line 13 or 19 is a loss, use zero)  
E. Subtract line D from line C. Enter the result here and on Form 8615, line 1  

Unearned income defined.

Unearned income is generally all income other than salaries, wages, and other amounts received as pay for work actually performed. It includes taxable interest, dividends, capital gains (including capital gain distributions), the taxable part of social security and pension payments, certain distributions from trusts, and unemployment compensation. Unearned income includes amounts produced by assets your child obtained with earned income (such as interest on a savings account into which you deposited wages).

Nontaxable income.

For this purpose, unearned income includes only amounts your child must include in gross income. Nontaxable unearned income, such as tax-exempt interest and the nontaxable part of social security and pension payments, isn’t included in gross income.

Figure 2. Does Your Child Have To Use Form 8615 To Figure Their Tax?

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Figure 2. Does Your Child Have To Use Form 8615 To Figure Their Tax?

Please click here for the text description of the image.

 

Capital loss.

Your child’s capital losses are taken into account in figuring their unearned income. Capital losses are first applied against capital gains. If the capital losses are more than the capital gains, the difference (up to $3,000) is subtracted from your child’s interest, dividends, and other unearned income. Any difference over $3,000 is carried to the next year.

Income from property received as a gift.

Your child’s unearned income includes all income produced by property belonging to your child. This is true even if the property was transferred to your child, regardless of when the property was transferred or purchased or who transferred it.

Your child’s unearned income includes income produced by property given as a gift to your child. This includes gifts to your child from grandparents or any other person and gifts made under the Uniform Gift to Minors Act.

Example.

Amanda Black, age 13, received the following income.

  • Dividends—$1,000

  • Wages—$2,100

  • Taxable interest—$1,200

  • Tax-exempt interest—$100

  • Capital gains—$300

  • Capital losses—($200)

The dividends were qualified dividends on stock given to her by her grandparents.

Amanda's unearned income is $2,300. This is the total of the dividends ($1,000), taxable interest ($1,200), and capital gains reduced by capital losses ($300 − $200 = $100). Her wages are earned (not unearned) income because they are received for work actually performed. Her tax-exempt interest isn’t included because it is nontaxable.

Trust income.

If your child is the beneficiary of a trust, distributions of taxable interest, dividends, capital gains, and other unearned income from the trust are unearned income to your child.

However, taxable distributions from a qualified disability trust are considered earned income for the purposes of completing Form 8615. See the Form 8615 instructions for details.

Adjustment to income.

In figuring the amount to enter on line 1, your child’s unearned income is reduced by any penalty on the early withdrawal of savings.

Line 2 (Deductions)

Enter $2,100 on line 2.

Line 3

Subtract line 2 from line 1 and enter the result on this line. If zero or less, don’t complete the rest of the form. However, you must still attach Form 8615 to your child’s tax return. Figure the tax on your child’s taxable income in the normal manner.

Line 4 (Child’s Taxable Income)

Enter on line 4 your child’s taxable income from Form 1040, line 10; or Form 1040NR, line 41.

Filing Form 2555 or 2555-EZ.

If your child files Form 2555 or 2555-EZ (relating to foreign earned income), your child will use the Foreign Earned Income Tax Worksheet (in the Form 1040 instructions) to figure their tax. Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as their taxable income on Form 8615, line 4.

Line 5

Enter on Form 8615, line 5, the smaller of line 3 or line 4.

If zero or less, don’t complete the rest of the form. However, you must still attach Form 8615 to your child’s tax return. Figure the tax on your child’s taxable income in the normal manner.

Step 2. Figuring the Tax (Form 8615, Part II)

Line 7 (Tax on Line 4 Amount)

Figure the tax on the amount on line 4 using the Line 7 Tax Computation Worksheet in the Instructions for Form 8615, the Qualified Dividends and Capital Gain Tax Worksheet in the Instructions for Form 1040 or Instructions for Form 1040NR, the Schedule D Tax Worksheet in the Instructions for Schedule D (Form 1040), or Schedule J (Form 1040) as follows.

  • If line 4 doesn’t include any net capital gain or qualified dividends, use the Line 7 Tax Computation Worksheet (or Schedule J, if applicable) to figure this tax.

  • If line 4 includes any net capital gain or qualified dividends, use the Qualified Dividends and Capital Gain Tax Worksheet to figure this tax. For details, see Using the Qualified Dividends and Capital Gain Tax Worksheet for line 7 tax in the Instructions for Form 8615. However, if your child has 28% rate gain or unrecaptured section 1250 gain, use the Schedule D Tax Worksheet. (But use Schedule J, if it applies.)

 

Qualified dividends.

Qualified dividends are those dividends reported on line 3a of Form 1040 or line 10b of Form 1040NR.

Net capital gain.

Net capital gain is the smaller of the gain, if any, on Schedule D (Form 1040), line 15, or the gain, if any, on Schedule D (Form 1040), line 16. If Schedule D isn’t required, it’s the amount on Schedule 1 (Form 1040), line 13; or Form 1040NR, line 14.

Using the Schedule D Tax Worksheet for line 7 tax.

If your child uses the Schedule D Tax Worksheet to figure the line 7 tax, complete that worksheet in its entirety but with the following modifications.

Line 15.

Add Form 8615, line 6 and $2,600. Enter the smaller of the result and the amount listed below for your child’s filing status.

  • Single or married filing separately — $38,600.

  • Head of household — $51,700.

 

Line 24.

Add Form 8615, line 6, and $12,700. Enter the smaller of the result and the amount listed below for your child’s filing status.

  • Single — $425,800.

  • Married filing separately — $239,500.

  • Head of household — $452,400.

 

Line 42.

Use the 2018 Line 7 Tax Computation Worksheet in the Instructions for Form 8615 to figure the amount to enter. (Or complete the 2018 Line 7 Tax Computation Worksheet again, using the amount from line 19 of the Schedule D Tax Worksheet instead of the amount from line 4 of Form 8615.)

Line 44.

Enter the tax on the amount on line 4 using the 2018 Line 7 Tax Computation Worksheet.

Using Schedule J (Form 1040) for line 7 tax.

If line 4 includes any farming or fishing income (including certain amounts received in connection with the Exxon Valdez litigation) and doesn't include any net capital gain or qualified dividends, use it to figure this tax without modifications. The tax may be less if you use Schedule J.

Alternative Minimum Tax

Your child may be subject to alternative minimum tax (AMT) if he or she has certain items given preferential treatment under the tax law. These items include accelerated depreciation and certain tax-exempt interest income. The AMT may also apply if your child has passive activity losses or certain distributions from estates or trusts.

For more information on who is liable for AMT and how to figure it, see Form 6251.

Limit on exemption amount (AMT).

Ordinarily, single individuals can subtract a $70,300 exemption amount from their AMT taxable income. However, a child who files Form 8615 has a limited exemption amount. Your child’s exemption amount for 2018 is limited to your child’s earned income plus $7,600. Figure your child’s allowable exemption amount on the worksheet in the instructions for Form 6251, line 5.

Publication 929 - Additional Material

How To Get Tax Help

If you have questions about a tax issue, need help preparing your tax return, or want to download free publications, forms, or instructions, go to IRS.gov and find resources that can help you right away.

Tax reform.

Major tax reform legislation impacting individuals, businesses, and tax-exempt entities was enacted in the Tax Cuts and Jobs Act on December 22, 2017. Go to IRS.gov/TaxReform for information and updates on how this legislation affects your taxes.

Preparing and filing your tax return.

Find free options to prepare and file your return on IRS.gov or in your local community if you qualify.

The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who generally make $55,000 or less, persons with disabilities, and limited-English-speaking taxpayers who need help preparing their own tax returns. The Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly those who are 60 years of age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors.

You can go to IRS.gov to see your options for preparing and filing your return which include the following.

 

  • Free File. Go to IRS.gov/FreeFile to see if you qualify to use brand-name software to prepare and e-file your federal tax return for free.

  • VITA. Go to IRS.gov/VITA, download the free IRS2Go app, or call 800-906-9887 to find the nearest VITA location for free tax return preparation.

  • TCE. Go to IRS.gov/TCE, download the free IRS2Go app, or call 888-227-7669 to find the nearest TCE location for free tax return preparation.

 

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Getting answers to your tax questions. On IRS.gov, get answers to your tax questions anytime, anywhere.

  • Go to IRS.gov/Help for a variety of tools that will help you get answers to some of the most common tax questions.

  • Go to IRS.gov/ITA for the Interactive Tax Assistant, a tool that will ask you questions on a number of tax law topics and provide answers. You can print the entire interview and the final response for your records.

  • Go to IRS.gov/Pub17 to get Pub. 17, Your Federal Income Tax for Individuals, which features details on tax-saving opportunities, 2018 tax changes, and thousands of interactive links to help you find answers to your questions. View it online in HTML, as a PDF, or download it to your mobile device as an eBook.

  • You may also be able to access tax law information in your electronic filing software.

 

Getting tax forms and publications.

Go to IRS.gov/Forms to view, download, or print all of the forms and publications you may need. You can also download and view popular tax publications and instructions (including the 1040 instructions) on mobile devices as an eBook at no charge. Or you can go to IRS.gov/OrderForms to place an order and have forms mailed to you within 10 business days.

Access your online account (individual taxpayers only).

Go to IRS.gov/Account to securely access information about your federal tax account.

  • View the amount you owe, pay online, or set up an online payment agreement.

  • Access your tax records online.

  • Review the past 24 months of your payment history.

  • Go to IRS.gov/SecureAccess to review the required identity authentication process.

 

Using direct deposit.

The fastest way to receive a tax refund is to combine direct deposit and IRS e-file. Direct deposit securely and electronically transfers your refund directly into your financial account. Eight in 10 taxpayers use direct deposit to receive their refund. The IRS issues more than 90% of refunds in less than 21 days.

Refund timing for returns claiming certain credits.

The IRS can’t issue refunds before mid-February 2019 for returns that claimed the earned income credit (EIC) or the additional child tax credit (ACTC). This applies to the entire refund, not just the portion associated with these credits.

Getting a transcript or copy of a return.

The quickest way to get a copy of your tax transcript is to go to IRS.gov/Transcripts. Click on either "Get Transcript Online" or "Get Transcript by Mail" to order a copy of your transcript. If you prefer, you can:

  • Order your transcript by calling 800-908-9946, or

  • Mail Form 4506-T or Form 4506T-EZ (both available on IRS.gov).

 

Using online tools to help prepare your return.

Go to IRS.gov/Tools for the following.

 

Resolving tax-related identity theft issues.

 

  • The IRS doesn’t initiate contact with taxpayers by email or telephone to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

  • Go to IRS.gov/IDProtection for information.

  • If your SSN has been lost or stolen or you suspect you’re a victim of tax-related identity theft, visit IRS.gov/IdentityTheft to learn what steps you should take.

 

Checking on the status of your refund.

 

  • Go to IRS.gov/Refunds.

  • The IRS can’t issue refunds before mid-February 2019 for returns that claimed the EIC or the ACTC. This applies to the entire refund, not just the portion associated with these credits.

  • Download the official IRS2Go app to your mobile device to check your refund status.

  • Call the automated refund hotline at 800-829-1954.

 

Making a tax payment.

The IRS uses the latest encryption technology to ensure your electronic payments are safe and secure. You can make electronic payments online, by phone, and from a mobile device using the IRS2Go app. Paying electronically is quick, easy, and faster than mailing in a check or money order. Go to IRS.gov/Payments to make a payment using any of the following options.

  • IRS Direct Pay: Pay your individual tax bill or estimated tax payment directly from your checking or savings account at no cost to you.

  • Debit or credit card: Choose an approved payment processor to pay online, by phone, and by mobile device.

  • Electronic Funds Withdrawal: Offered only when filing your federal taxes using tax return preparation software or through a tax professional.

  • Electronic Federal Tax Payment System: Best option for businesses. Enrollment is required.

  • Check or money order: Mail your payment to the address listed on the notice or instructions.

  • Cash: You may be able to pay your taxes with cash at a participating retail store.

 

What if I can’t pay now?

Go to IRS.gov/Payments for more information about your options.

  • Apply for an online payment agreement (IRS.gov/OPA) to meet your tax obligation in monthly installments if you can’t pay your taxes in full today. Once you complete the online process, you will receive immediate notification of whether your agreement has been approved.

  • Use the Offer in Compromise Pre-Qualifier (IRS.gov/OIC) to see if you can settle your tax debt for less than the full amount you owe.

 

Checking the status of an amended return.

Go to IRS.gov/WMAR to track the status of Form 1040X amended returns. Please note that it can take up to 3 weeks from the date you mailed your amended return for it to show up in our system and processing it can take up to 16 weeks.

Understanding an IRS notice or letter.

Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter.

Contacting your local IRS office.

Keep in mind, many questions can be answered on IRS.gov without visiting an IRS Tax Assistance Center (TAC). Go to IRS.gov/LetUsHelp for the topics people ask about most. If you still need help, IRS TACs provide tax help when a tax issue can’t be handled online or by phone. All TACs now provide service by appointment so you’ll know in advance that you can get the service you need without long wait times. Before you visit, go to IRS.gov/TACLocator to find the nearest TAC, check hours, available services, and appointment options. Or, on the IRS2Go app, under the Stay Connected tab, choose the Contact Us option and click on “Local Offices.”

Watching IRS videos.

The IRS Video portal (IRSVideos.gov) contains video and audio presentations for individuals, small businesses, and tax professionals.

Getting tax information in other languages.

For taxpayers whose native language isn’t English, we have the following resources available. Taxpayers can find information on IRS.gov in the following languages.

 

The IRS TACs provide over-the-phone interpreter service in over 170 languages, and the service is available free to taxpayers.

The Taxpayer Advocate Service (TAS) Is Here To Help You

What is TAS?

TAS is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Their job is to ensure that every taxpayer is treated fairly and that you know and understand your rights under the Taxpayer Bill of Rights.

How Can You Learn About Your Taxpayer Rights?

The Taxpayer Bill of Rights describes 10 basic rights that all taxpayers have when dealing with the IRS. Go to TaxpayerAdvocate.IRS.gov to help you understand what these rights mean to you and how they apply. These are your rights. Know them. Use them.

What Can TAS Do For You?

TAS can help you resolve problems that you can’t resolve with the IRS. And their service is free. If you qualify for their assistance, you will be assigned to one advocate who will work with you throughout the process and will do everything possible to resolve your issue. TAS can help you if:

  • Your problem is causing financial difficulty for you, your family, or your business;

  • You face (or your business is facing) an immediate threat of adverse action; or

  • You’ve tried repeatedly to contact the IRS but no one has responded, or the IRS hasn’t responded by the date promised.

 

How Can You Reach TAS?

TAS has offices in every state, the District of Columbia, and Puerto Rico. Your local advocate’s number is in your local directory and at TaxpayerAdvocate.IRS.gov/Contact-Us. You can also call them at 877-777-4778.

How Else Does TAS Help Taxpayers?

TAS works to resolve large-scale problems that affect many taxpayers. If you know of one of these broad issues, please report it to them at IRS.gov/SAMS.

TAS also has a website, Tax Reform Changes, which shows you how the new tax law may change your future tax filings and helps you plan for these changes. The information is categorized by tax topic in the order of the IRS Form 1040. Go to TaxChanges.us for more information.

Low Income Taxpayer Clinics (LITCs)

LITCs are independent from the IRS. LITCs represent individuals whose income is below a certain level and need to resolve tax problems with the IRS, such as audits, appeals, and tax collection disputes. In addition, clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee. To find a clinic near you, visit TaxpayerAdvocate.IRS.gov/LITCmap or see IRS Pub. 4134, Low Income Taxpayer Clinic List.

Index

Symbols

28% rate gain, Collectibles (28% rate) gain.

A

Adjustments to income, defined, Adjustment to income.
Age 65 or older dependents, Both Earned and Unearned Income
Aliens
Individual taxpayer identification number (ITIN), Reminders
Standard deduction, Standard Deduction of Zero
Alternative minimum tax (AMT), Other Filing Requirements, Alternative minimum tax., Alternative Minimum Tax
Assistance (see Tax help)

B

Blind dependents, filing requirements, Both Earned and Unearned Income

C

Capital gain distributions, Capital gain distributions.
Capital losses, Capital loss.
Child's earnings, Child's earnings.
Child's expenses, Child's expenses.
Child's return
Responsibility for, Should a Return Be Filed Even If Not Required?, Child's expenses.
Child's unearned income
Tax on, Renewing an exemption from withholding.
Church, wages from, Other Filing Requirements
Credits, reduced, Reduced deductions or credits.

D

Deductible investment interest, Deductible investment interest.
Deductions, Deductions you can’t take.
Deductions, reduced, Reduced deductions or credits.
Dependents
Exemption for, Standard Deduction of Zero
Own exemption, Standard Deduction of Zero
Social security numbers (SSNs) of, Reminders
Divorced parents, reporting child's unearned income, Parents are divorced.

E

Earned income, Earned Income Only, Both Earned and Unearned Income
Education credit, recaptured, Other Filing Requirements
Election to include child's income on parent's return, Parent's Election To Report Child's Interest and Dividends, How to make the election.,
Estimated tax, penalty, Penalty for underpayment of estimated tax.
Exemption
Own exemption — dependent, Dependent's Own Exemption
Exemption from withholding, Claiming exemption from withholding.

G

Gift, income from property received as, Income from property received as a gift.

I

Identity theft, Resolving tax-related identity theft issues.
Individual taxpayer identification numbers (ITINs), Reminders
Investment interest, Deductible investment interest.
IRS notice sent to child, IRS notice.

J

Joint return of parents, Which Parent's Return To Use

L

Life insurance, Other Filing Requirements
Limit on exemption amount (AMT)
Alternative Minimum Tax — Limit on exemption amount, Limit on exemption amount (AMT).

M

Married parents filing separately, Parents are married.
Medicare tax, Other Filing Requirements
Missing children, photographs of, Reminders

N

Net unearned income, Line 5

P

Parents
Election (see Election to include child's income on parent's return)
Which parent's return to use, Which Parent's Return To Use
Penalty, estimated tax, Penalty for underpayment of estimated tax.
Publications (see Tax help)

Q

Qualified dividends, Qualified dividends.

R

Recapture taxes, Other Filing Requirements
Remarried custodial parent, reporting child's unearned income, Custodial parent remarried.
Remarried widowed parent, reporting child's unearned income, Widowed parent remarried.
Returns
Filing even if not required, Should a Return Be Filed Even If Not Required?
Parent's election to include child's income (see Election to include child's income on parent's return)
Responsibility for child's return, Responsibility for Child's Return, Child's expenses.
Signing child's return, Signing the child's return.
Who must file, Filing Requirements, Should a Return Be Filed Even If Not Required?

S

Section 1202 gain, Section 1202 gain.
Self-employed, filing requirements, Other Filing Requirements
Separated parents, reporting child's unearned income, Parents not living together.
Signing child's return, Signing the child's return.
Social security numbers (SSNs) of dependents, Reminders
Social security tax, Other Filing Requirements
Standard deduction, Standard Deduction, Standard Deduction of Zero
Worksheet for dependents (Worksheet 1), Worksheet 1.
Zero, Standard Deduction of Zero

T

Tables and figures
Determining whether Form 8615 is required (Figure 2),
Election to include child's income on parent's return (Figure 1),
Filing requirements for dependents (Table 1), Table 1. 2018 Filing Requirements for Dependents
Tax help, How To Get Tax Help
Tax on child's unearned income, Renewing an exemption from withholding.
Age requirement, Certain January 1 birthdays.
Figured on Form 8615, Tax for Certain Children Who Have Unearned Income
Third party designee, Third party designee.
Tips not reported to employer, Other Filing Requirements
Trust income, Trust income.

W

Withholding, Withholding From Wages
Worksheets
Dependent's filing requirement, Both Earned and Unearned Income
Form 8615 alternate worksheet, Line 1 (Unearned Income)
Standard deduction worksheet for dependents (Worksheet 1), Worksheet 1.