Investment Income of Your Minor Child

If a child that you can claim as a dependent had (a) unearned income (e.g. interest, dividends, investments) over $750, (b) earned income over $4,550 or (c) gross income that was the greater of $750 or earned income up to $4,300 plus $250, he or she must report this income on a tax return of some sort.

• Reporting on the child's own return — if the child had income of $7,500 or more, he or she must file an individual tax return on Form 1040-EZ, 1040A or 1040, regardless of age. If an under-14-year-old reports income on his or her own individual tax return, he or she may have to attach Form 8615 and pay the "kiddie tax."
• Reporting a child's income on your return However, if the child was under 14 at all times during 2001 (that is, the child did not turn 14 until January 1, 2002 or later), and the child's income was less than $7,500, you may be able to elect to report the child's income on your own tax return.