Form 8814 is the IRS form parents attach to their own return to report a child’s interest and dividend income instead of filing a separate return for the child. For the 2026 tax year, you can make this election if your child’s gross income from interest and dividends is more than $1,350 and less than $13,500 and the child has no other income, no withholding, and no estimated payments. The instructions for Form 8814 are short, but the decision to use it is not: the election can raise your total tax compared with filing a return in the child’s name, so run both numbers before you commit.
Who Can Use Form 8814
Your child has to clear every one of these conditions for 2026:
- Under 19 at the end of the year, or under 24 if a full-time student.
- Income was only interest and dividends, including capital gain distributions and Alaska Permanent Fund dividends. Any earned income or other unearned income disqualifies the election.
- Gross income was more than $1,350 but less than $13,500.
- No estimated tax payments were made in the child’s name, including a prior-year overpayment applied forward.
- No federal income tax was withheld from the child’s income.
- The child does not file a joint return.
Below $1,350, there’s no tax and no return. At $13,500 or above, or with any earned income mixed in, Form 8814 is off the table and the child files their own return using Form 8615.1Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends
Which Parent Files
Filing jointly? Attach one Form 8814 to the joint return and move on. Filing separately as a married couple, the parent with the higher taxable income makes the election. Divorced or separated, the custodial parent reports the child’s income. Which parent files matters because the income above the threshold is taxed at that parent’s marginal rate.1Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends
If you have more than one qualifying child, file a separate Form 8814 for each. Each form runs its own calculation.1Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends
What to Gather Before You Start
You need your Social Security number, the child’s Social Security number, and the child’s investment income documents: Form 1099-INT for interest, Form 1099-DIV for dividends and capital gain distributions, and any Schedule K-1 if the child is a trust or partnership beneficiary.
Three totals from those documents drive the form: the child’s total taxable interest, total ordinary dividends, and total capital gain distributions. Tax-exempt interest, like municipal bond interest, is reported separately on Line 1b. It doesn’t enter the tax calculation, but it does carry over to your return.1Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends
How the Tax Is Calculated
Part I of the form collects the identifying information and the three income figures. Part II does the math, and for 2026 the child’s unearned income sits in three brackets:
- The first $1,350 is not taxed, covered by the child’s limited standard deduction.
- The next $1,350 is taxed at a flat 10%, regardless of income type.
- Everything above $2,700 is taxed at your marginal rate, stacked on top of your taxable income.
Line 4 subtracts the $2,700 combined threshold from the child’s total income to get Line 6, the net amount subject to your rate.1Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends
Lines 7 through 12 split the income between ordinary income and capital gains, because capital gains and qualified dividends keep their preferential rates on your return. The $2,700 threshold is applied proportionally across income types: if half the child’s income is capital gain distributions and half is interest, the threshold reduction splits evenly. Lines 13 through 15 produce the final tax figure, using your rates and the preferential rates where they apply. Line 15 is the additional tax you owe because of the child’s income.1Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends
How It Lands on Your 1040
Attach the completed Form 8814 to your Form 1040, 1040-SR, or 1040-NR. The election is only valid if the form is filed with the return by the due date, including extensions.1Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends
Two numbers leave the form. Line 15 goes to Schedule 2 (Additional Taxes) and flows into your total tax. Line 9, the child’s income taxable at your rate, is reported on the “Other income” line of your 1040. That second transfer is the one to watch, because it raises your adjusted gross income.
Should You Use Form 8814 at All
The IRS instructions themselves recommend comparing Form 8814 to filing a return in the child’s name before choosing.1Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends There are three reasons the election can cost more than it saves in effort.
The Flat 10% on the Middle Bracket
When a child files their own return, qualified dividends and capital gains in the $1,350-to-$2,700 range can qualify for the 0% capital gains rate, because the child’s total income is so low. Under Form 8814, that same slice is taxed at a flat 10% no matter the income type. The maximum overpayment this creates is $135 per child.1Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends
Deductions the Child Loses
Folding the child’s income into your return forfeits deductions the child could have claimed on their own return:
- The additional standard deduction of $2,000 if the child is blind.
- The penalty on early withdrawal of the child’s savings, which comes up when a CD is cashed early.
- Itemized deductions such as the child’s charitable contributions.
Most children with pure investment income won’t have any of these. If yours does, they disappear under the election.1Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends
The AGI Ripple
The larger risk is what a higher AGI does to your own return. Adding the child’s income to your Other income line can push you across a phase-out threshold. The IRS instructions flag these benefits as potentially affected:
- Deduction for traditional IRA contributions
- Deduction for student loan interest
- Child tax credit
- Credit for child and dependent care expenses
- Education tax credits
- Earned income credit
- Itemized deductions for medical expenses, state and local taxes, and casualty losses
If you’re near any of these thresholds, the cost of the election can dwarf the $135 flat-rate issue. A parent close to the earned income credit cutoff, for example, can lose hundreds or thousands in credit from a few hundred dollars of added AGI.1Internal Revenue Service. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends
When the Election Still Makes Sense
Form 8814 works cleanly when the child’s investment income is modest, your AGI sits well below any phase-out you care about, and the income is mostly ordinary interest rather than qualified dividends or capital gains. In that setup, the tax bill is the same or nearly the same as it would be on a separate return, and you skip a second filing. Otherwise, run both calculations. Tax software handles the comparison in a few minutes, and the IRS instructions specifically point you to it.2Internal Revenue Service. Topic No. 553, Tax on a Child’s Investment and Other Unearned Income