Do I Need to Report My Child’s 1099-INT on My Return?

Reporting your child’s 1099-INT on your own tax return is only required in one scenario, and even then it’s optional. For the 2026 tax year, if your child’s total unearned income stays at or below $1,350, no one files anything. Above that, you can either attach IRS Form 8814 to your own Form 1040 and include the child’s interest and dividends there, or have your child file a separate return. The 1099-INT itself never has to appear on your return unless you make that election.¹

The $1,350 Threshold

A dependent child with only interest income does not need to file a return, and you don’t need to report that income on yours, if the total is $1,350 or less for 2026.¹ The bank still issues a 1099-INT once interest reaches $10, and the IRS still receives its copy, but no return is due when the amount falls under the filing threshold.² Keep the form with your records and move on.

This is where most parents with a child’s savings account land. A standard account earning 4% interest would need a balance above roughly $33,750 before the interest crosses $1,350. If that describes your child’s account, you’re done. Nothing goes on your return.

A child who also has earned income from a job faces a slightly different test: they must file if gross income exceeds the greater of $1,350 or their earned income plus $450.³

What Happens Once the Threshold Is Crossed

Once your child’s unearned income passes $1,350, someone has to file. You have two options:

Include the child’s interest and dividends on your own Form 1040 by attaching Form 8814.
File a separate Form 1040 for the child.

Neither is universally better. The right answer depends on the amount, the type of income involved, and whether your own return sits near any income-based phaseout.

Putting the Income on Your Return With Form 8814

The Form 8814 election is available only when every one of the following is true:⁴

The child received only interest, ordinary dividends, and capital gain distributions. No wages, no self-employment income, nothing else.
The child’s gross income was more than $1,350 but less than $13,500.
No federal income tax was withheld from the child’s income, and no estimated tax payments were made in the child’s name.
The child is not filing a joint return.

If your child has even a small amount of earned income from a summer job, Form 8814 is off the table and the child must file. You must also file a separate Form 8814 for each child whose income you’re including.

The tax on the form works in tiers. The first $1,350 of the child’s income isn’t taxed. The next $1,350 (income between $1,350 and $2,700) is taxed at a flat 10%. Any income above $2,700 is added to your taxable income and taxed at your marginal rate.¹

The Hidden Cost of the Election

Adding your child’s income to your return raises your adjusted gross income, and a higher AGI can shrink or wipe out things you’d otherwise claim. The IRS instructions for Form 8814 specifically warn that the election may reduce your eligibility for the child tax credit, the earned income credit, education tax credits, the student loan interest deduction, the traditional IRA contribution deduction, the child and dependent care credit, and medical expense deductions that use a percentage-of-AGI floor.⁵

Qualified dividends and capital gain distributions add another wrinkle. Form 8814 taxes the child’s income between $1,350 and $2,700 at a flat 10%. On a separate child’s return, those same qualified dividends and capital gains could qualify for the 0% preferential rate. The IRS estimates the difference can cost up to $135 in extra tax.⁵

For a child with a few hundred dollars of ordinary savings-account interest, Form 8814 is the simpler choice and rarely causes trouble. If the child’s income is several thousand dollars, or your own AGI is anywhere near a phaseout threshold, work the numbers both ways before you file.

Filing a Separate Return for the Child

A separate return is required when the child’s income exceeds $13,500, includes any earned income, includes income types beyond interest and dividends, or when estimated tax payments were made in the child’s name or backup withholding applied.⁴

Some parents choose a separate return even when Form 8814 is available, specifically to keep the child’s income off their own AGI and protect other credits and deductions. For a young child who can’t sign, you sign for them: write the child’s name on the signature line, then add “By [your signature], parent for minor child.”⁶

The Kiddie Tax Applies Either Way

Whichever path you choose, the underlying tax math is the same, because the “kiddie tax” is designed to prevent parents from shifting investment income into a child’s lower bracket. It applies to children under 18, children who are 18 and don’t earn more than half their own support, and full-time students aged 19 through 23 who don’t earn more than half their own support.⁷

For 2026 the tiers are:¹

First $1,350: covered by the dependent standard deduction, no tax.
Next $1,350 (from $1,350 to $2,700): taxed at the child’s own rate, typically 10%.
Above $2,700: taxed at the parent’s marginal rate.

When the child files separately, Form 8615 is the mechanism for calculating the kiddie tax on the amount above $2,700.⁸ Whoever prepares the child’s return needs the parent’s taxable income and filing status to complete it. That information is used only for the rate calculation; it doesn’t change the parent’s own tax bill.

Which Parent’s Rate Applies

When parents file jointly, that return determines the rate. Otherwise:⁸

Married filing separately: the return of the parent with the higher taxable income.
Divorced or legally separated: the custodial parent’s return, meaning the parent who had the child for the greater part of the year.
Never married and living together: the parent with the higher taxable income.
Never married and living apart: the custodial parent’s return.

What Happens If Nobody Reports It

If your child’s interest income exceeds $1,350 and no return reports it, the IRS can assess penalties on the unpaid tax plus interest on the balance owed. This applies whether the income belonged on your return or the child’s. Because the bank sends a copy of the 1099-INT to the IRS, unreported interest is one of the easiest mismatches for automated systems to catch.

For a child with several thousand dollars of investment income and no withholding, estimated tax payments may be needed to avoid an underpayment penalty. You can generally avoid that penalty if the total tax owed after credits is less than $1,000, or if you paid at least 90% of the current year’s tax, or 100% of the prior year’s, whichever is less.⁹

State Rules Are Separate

Federal thresholds are only half the picture. Most states with an income tax set their own filing thresholds for dependents, and those thresholds vary. Some track the federal rules closely, others set much lower ones. Check your state’s department of revenue for the dollar amount that triggers a dependent filing requirement, because it may sit below $1,350 and pull your child into a state return even when no federal return is due.

1
Internal Revenue Service. Revenue Procedure 2025-32
2
Internal Revenue Service. About Form 1099-INT, Interest Income
3
Internal Revenue Service. Publication 501 – Dependents, Standard Deduction, and Filing Information
4
Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends
5
Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends
6
Internal Revenue Service. Return Signature
7
Internal Revenue Service. Topic No. 553, Tax on a Child’s Investment and Other Unearned Income (Kiddie Tax)
8
Internal Revenue Service. Instructions for Form 8615 – Tax for Certain Children Who Have Unearned Income
9
Internal Revenue Service. Topic No. 306, Penalty for Underpayment of Estimated Tax