Form 8814 Parents' Election to Report Child's Interest and Dividen

Form

8814

Department of the Treasury
Internal Revenue Service (99)
Name(s) shown on your return

Parents' Election To Report
Child's Interest and Dividends

OMB No. 1545-0074

2010

See instructions.
Attach to parents' Form 1040 or Form 1040NR.
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Attachment
Sequence No. 40
Your social security number

Caution. The federal income tax on your child’s income, including qualified dividends and capital gain distributions, may be less if you
file a separate tax return for the child instead of making this election. This is because you cannot take certain tax benefits that your
child could take on his or her own return. For details, see Tax benefits you cannot take on page 3.
A Child's name (first, initial, and last)
B Child’s social security number

C If more than one Form 8814 is attached, check here

Part I

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Child’s Interest and Dividends To Report on Your Return

1a

Enter your child’s taxable interest. If this amount is different from the amounts shown on the
child’s Forms 1099-INT and 1099-OID, see the instructions . . . . . . . . . . . .
b Enter your child’s tax-exempt interest. Do not include this amount
on line 1a . . . . . . . . . . . . . . . . . . .
1b
2a Enter your child’s ordinary dividends, including any Alaska Permanent Fund dividends. If your
child received any ordinary dividends as a nominee, see the instructions . . . . . . . .
b Enter your child’s qualified dividends included on line 2a. See the
instructions . . . . . . . . . . . . . . . . . .
2b
Enter your child’s capital gain distributions. If your child received any capital gain distributions
3
as a nominee, see the instructions
. . . . . . . . . . . . . . . . . . . .
4

Add lines 1a, 2a, and 3. If the total is $1,900 or less, skip lines 5 through 12 and go to line 13. If
the total is $9,500 or more, do not file this form. Your child must file his or her own return to
report the income . . . . . . . . . . . . . . . . . . . . . . . . . .

5
6

Base amount
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtract line 5 from line 4 . . . . . . . . . . . . . . . . . . . . . . .
If both lines 2b and 3 are zero or blank, skip lines 7 through 10, enter -0- on line 11, and go
to line 12. Otherwise, go to line 7.
Divide line 2b by line 4. Enter the result as a decimal (rounded to at
least three places) . . . . . . . . . . . . . . . .
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7
Divide line 3 by line 4. Enter the result as a decimal (rounded to at
least three places) . . . . . . . . . . . . . . . .
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8
Multiply line 6 by line 7. Enter the result here. See the instructions
for where to report this amount on your return . . . . . . .
9
Multiply line 6 by line 8. Enter the result here. See the instructions
for where to report this amount on your return . . . . . . .
10
Add lines 9 and 10 . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtract line 11 from line 6. Include this amount in the total on Form 1040, line 21, or Form
1040NR, line 21. In the space next to line 21, enter “Form 8814” and show the amount. If you
checked the box on line C above, see the instructions. Go to line 13 below . . . . . . .

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Part II

1a

2a

3

4
5
6

1,900 00

11

12

Tax on the First $1,900 of Child’s Interest and Dividends

950 00
13
Amount not taxed . . . . . . . . . . . . . . . . . . . . . . . . . .
14
Subtract line 13 from line 4. If the result is zero or less, enter -0- . . . . . . . . . . .
Tax. Is the amount on line 14 less than $950?
No. Enter $95 here and see the Note below.
15
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Yes. Multiply line 14 by 10% (.10). Enter the result here and see the Note below.
Note. If you checked the box on line C above, see the instructions. Otherwise, include the amount from line 15 in the tax you enter
on Form 1040, line 44, or Form 1040NR, line 42. Be sure to check box a on Form 1040, line 44, or Form 1040NR, line 42.
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For Paperwork Reduction Act Notice, see your tax return instructions.

}

Cat. No. 10750J

Form 8814 (2010)

Page 3

Form 8814 (2010)

General Instructions
Purpose of Form
Use this form if you elect to report your child’s income on your
return. If you do, your child will not have to file a return. You can
make this election if your child meets all of the following
conditions.
• The child was under age 19 (or under age 24 if a full-time
student) at the end of 2010. “Student” is defined below.
• The child’s only income was from interest and dividends,
including capital gain distributions and Alaska Permanent Fund
dividends.
• The child’s gross income for 2010 was less than $9,500.
• The child is required to file a 2010 return.
• The child does not file a joint return for 2010.
• There were no estimated tax payments for the child for 2010
(including any overpayment of tax from his or her 2009 return
applied to 2010 estimated tax).
• There was no federal income tax withheld from the child’s
income.
You must also qualify. See Parents who qualify to make the
election below.
Student. A student is a child who for some part of each of 5
calendar months during the year was enrolled as a full-time
student at a school, or took a full-time, on-farm training course
given by a school or a state, county, or local government
agency. A school includes a technical, trade, or mechanical
school. It does not include an on-the-job training course,
correspondence school, or school offering courses only through
the Internet.
Certain January 1 birthdays. A child born on January 1, 1992,
is considered to be age 19 at the end of 2010. You cannot
make this election for such a child unless the child was a
full-time student.
A child born on January 1, 1987, is considered to be age 24 at
the end of 2010. You cannot make this election for such a child.
How to make the election. To make the election, complete and
attach Form(s) 8814 to your tax return and file your return by the
due date (including extensions). A separate Form 8814 must be
filed for each child whose income you choose to report.
Parents who qualify to make the election. You qualify to
make this election if you file Form 1040 or Form 1040NR and
any of the following apply.
• You are filing a joint return for 2010 with the child’s other
parent.
• You and the child’s other parent were married to each other
but file separate returns for 2010 and you had the higher
taxable income.
• You were unmarried, treated as unmarried for federal income
tax purposes, or separated from the child’s other parent by a
divorce or separate maintenance decree. The child must have
lived with you for most of the year (you were the custodial
parent). If you were the custodial parent and you remarried, you
can make the election on a joint return with your new spouse.
But if you and your new spouse do not file a joint return, you
qualify to make the election only if you had higher taxable
income than your new spouse.
Note. If you and the child’s other parent were not married but
lived together during the year with the child, you qualify to make
the election only if you are the parent with the higher taxable
income.

Tax benefits you cannot take. If you elect to report your child’s
income on your return, you cannot take certain deductions that
your child could take on his or her own return such as:
• Additional standard deduction of $1,400 if the child is blind,
• Penalty on early withdrawal of child’s savings, and
• Itemized deductions such as the child’s investment expenses
or charitable contributions.
If your child received qualified dividends or capital gain
distributions, you may pay up to $95 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 $950 and
$1,900 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.
If any of the above apply to your child, first figure the tax on
your child’s income as if he or she is filing a return. Next, figure
the tax as if you are electing to report your child’s income on
your return. Then, compare the methods to determine which
results in the lower tax.
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 take this into account in determining if you owe the
alternative minimum tax. This type of interest should be shown
in box 9 of Form 1099-INT. See Form 6251, Alternative
Minimum Tax—Individuals, and its instructions for details.
Investment interest expense. Your child’s income (other than
qualified dividends, Alaska Permanent Fund dividends, and
capital gain distributions) that you report on your return is
considered to be your investment income for purposes of
figuring your investment interest expense deduction. If your
child received qualified dividends, Alaska Permanent Fund
dividends, or capital gain distributions, see Pub. 550,
Investment Income and Expenses, to figure the amount you can
treat as your investment income.
Foreign accounts and trusts. If your child (a) had a foreign
financial account or (b) received a distribution from, or was the
grantor of, or transferor to, a foreign trust, you must complete
Schedule B (Form 1040), Part III, and file it with your return.
Enter “Form 8814” on the dotted line next to line 7a or line 8,
whichever applies. Complete line 7b if applicable.
Change of address. If your child filed a return for a previous
year and the address shown on the last return filed is not your
child’s current address, be sure to notify the IRS, in writing, of
the new address. To do this, use Form 8822, Change of
Address.
Additional information. See Pub. 929, Tax Rules for Children
and Dependents, for more details.

Line Instructions
Name and social security number. If you are filing a joint
return, include your spouse’s name but enter the social security
number of the person whose name is shown first on the return.
Line 1a. Enter all taxable interest income your child received in
2010. Do not include tax-exempt interest in the total for line 1a,
but be sure to include it on line 1b.
If your child received, as a nominee, interest that actually
belongs to another person, enter the amount and “ND” (for
nominee distribution) on the dotted line next to line 1a. Do not
include amounts received as a nominee in the total for line 1a.

(continued)

Form 8814 (2010)

Page 4

If your child had accrued interest that was paid to the seller of
a bond, amortizable bond premium (ABP) allowed as a
reduction to interest income, or if any original issue discount
(OID) is less than the amount shown on your child’s Form
1099-OID, enter the nontaxable amount on the dotted line next
to line 1a and “Accrued interest,” “ABP adjustment,” or “OID
adjustment,” whichever applies. Do not include any nontaxable
amounts in the total for line 1a.

If your child received, as a nominee, capital gain distributions
that actually belong to another person, enter the amount and
“ND” on the dotted line next to line 3. Do not include amounts
received as a nominee in the total for line 3.

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.

If you file Schedule B, include this amount on Schedule B, line
5, and identify it as from “Form 8814.” Also include this amount
on Form 1040, line 9b, or Form 1040NR, line 10b.

Note. If line 1b includes tax-exempt interest or exempt-interest
dividends paid by a regulated investment company from private
activity bonds, see Alternative minimum tax on page 3.
Line 2a. Enter the ordinary dividends your child received in
2010. Ordinary dividends should be shown in box 1a of Form
1099-DIV. Also include ordinary dividends your child received
through a partnership, an S corporation, or an estate or trust.
If your child received, as a nominee, ordinary dividends that
actually belong to another person, enter the amount and “ND”
on the dotted line next to line 2a. Do not include amounts
received as a nominee in the total for line 2a.
Line 2b. Enter all qualified dividends your child received in
2010. Qualified dividends are the ordinary dividends that are
eligible for the same lower tax rate as a net capital gain.
Qualified dividends should be shown in box 1b of Form
1099-DIV.
Line 3. Enter the capital gain distributions your child received in
2010. Capital gain distributions should be shown in box 2a of
Form 1099-DIV.

Line 9. Include this amount on Form 1040, lines 9a and 9b, or
Form 1040NR, lines 10a and 10b. Enter “Form 8814” and this
amount on the dotted line next to those lines unless you file
Schedule B (Form 1040).

You must file Schedule B if this amount plus the parents’
dividends is more than $1,500.
Line 10. Include this amount on Schedule D, line 13; Form 1040,
line 13; or Form 1040NR, line 14. Enter “Form 8814” and this
amount on the dotted line next to line 13 of Schedule D or in
the space to the left of line 13 of Form 1040 or line 14 of Form
1040NR.
If any of the child’s capital gain distributions were reported on
Form 1099-DIV as unrecaptured section 1250 gain, section
1202 gain, or collectibles (28%) gain, see Pub. 929 for details on
the amount to report on Schedule D.
Line 12. If you checked the box on line C, add the amounts
from line 12 of all your Forms 8814. Include the result on Form
1040, line 21, or Form 1040NR, line 21, whichever applies. Enter
“Form 8814” and the total of the line 12 amounts on the dotted
line next to line 21.
Line 15. If you checked the box on line C, add the amounts
from line 15 of all your Forms 8814. Include the total on Form
1040, line 44, or Form 1040NR, line 42. Be sure to check box a
on that line.