U.S. Individual Income Tax Return

2012

Instructions for Form 8615

Department of the Treasury
Internal Revenue Service

Tax for Certain Children Who Have Investment Income of More Than $1,900
support if your child is a full-time student. For details, see
Pub. 501, Exemptions, Standard Deduction, and Filing
Information.

General Instructions
Future Developments

For the latest information about developments related to
Form 8615 and its instructions, such as legislation
enacted after they were published, go to www.irs.gov/
form8615.

Purpose of Form

For children under age 18 and certain older children
described below in Who Must File, investment income
over $1,900 is taxed at the parent's rate if the parent's rate
is higher than the child's. If the child's investment income
is more than $1,900, use Form 8615 to figure the child's
tax.

Investment Income

For Form 8615, “investment income” includes all taxable
income other than earned income as defined later.
Investment income includes taxable interest, ordinary
dividends, capital gains (including capital gain
distributions), rents, royalties, etc. It also includes taxable
social security benefits, pension and annuity income, and
income (other than earned income) received as the
beneficiary of a trust.

Who Must File

Form 8615 must be filed for any child who meets all of the
following conditions.
1. The child had more than $1,900 of investment
income.
2. The child is required to file a tax return.
3. The child either:
a. Was under age 18 at the end of 2012,
b. Was age 18 at the end of 2012 and did not have
earned income that was more than half of the child's
support, or
c. Was over age 18 and under age 24 at the end of
2012, was a full-time student, and did not have earned
income that was more than half of the child's support.
(Earned income is defined later. Support is defined
below.)
4. At least one of the child's parents was alive at the
end of 2012.
5. The child does not file a joint return for 2012.

Support. Your child's support includes all amounts spent
to provide the child with food, lodging, clothing, education,
medical and dental care, recreation, transportation, and
similar necessities. To figure your child's support, count
support provided by you, your child, and others. However,
a scholarship received by your child is not considered
Aug 21, 2012

Certain January 1 birthdays. Use the following chart to
determine whether certain children with January 1
birthdays meet condition 3 under Who Must File.
IF a child was born on...

THEN, at the end of 2012,
the child is considered to
be...

January 1, 1995

18*

January 1, 1994

19**

January 1, 1989

24***

*This child is not under age 18. The child meets condition 3 only if
the child did not have earned income that was more than half of the
child's support.
**This child meets condition 3 only if the child was a full-time student
who did not have earned income that was more than half of the
child's support.
***Do not use Form 8615 for this child.

The parent may be able to elect to report the
child's interest, ordinary dividends, and capital
gain distributions on the parent's return. If the
parent makes this election, the child will not have to file a
return or Form 8615. However, the federal income tax on
the child's income, including qualified dividends and
capital gain distributions, may be higher if this election is
made. For more details, see Form 8814, Parents' Election
To Report Child's Interest and Dividends.

TIP

Additional Information

For more details, see Pub. 929, Tax Rules for Children
and Dependents.

Incomplete Information for Parent or
Other Children

If the parent's taxable income, filing status, or the net
investment income of the parent's other children is not
known by the due date of the child's return, reasonable
estimates can be used. Enter “Estimated” next to the
appropriate line(s) of Form 8615. When the correct
information is available, file Form 1040X, Amended U.S.
Individual Income Tax Return.
Instead of using estimates, the child can get an
automatic 6-month extension of time to file. For details,
see Form 4868, Application for Automatic Extension of
Time To File U.S. Individual Income Tax Return.

Amended Return

If after the child's return is filed, the parent's taxable
income changes or the net investment income of any of

Cat. No. 28914R

portion of self-employment tax). However, the 30% limit
does not apply if there are no net profits from the trade or
business.
If capital is not an income-producing factor and the
child's personal services produced the business income,
all of the child's gross income from the trade or business
is considered earned income. In that case, earned income
is generally the total of the amounts reported on Form
1040, lines 7, 12, and 18; Form 1040A, line 7; or Form
1040NR, lines 8, 13, and 19.
Earned income also includes any taxable distribution
from a qualified disability trust. A qualified disability trust is
any nongrantor trust:
1. Described in 42 U.S.C. 1396p(c)(2)(B)(iv) and
established solely for the benefit of an individual under 65
years of age who is disabled, and
2. All the beneficiaries of which are determined by the
Commissioner of Social Security to have been disabled
for some part of the tax year within the meaning of 42
U.S.C. 1382c(a)(3).

the parent's other children changes, the child's tax must
be refigured using the adjusted amounts. If the child's tax
changes, file Form 1040X to correct the child's tax.

Alternative Minimum Tax

A child whose tax is figured on Form 8615 may owe the
alternative minimum tax. For details, see Form 6251,
Alternative Minimum Tax—Individuals, and its
instructions.

Line Instructions
Lines A and B

If the child's parents were married to each other and filed
a joint return, enter the name and social security number
(SSN) of the parent who is listed first on the joint return.
If the parents were married but filed separate returns,
enter the name and SSN of the parent who had the higher
taxable income. If you do not know which parent had the
higher taxable income, see Pub. 929.

A trust will not fail to meet (2) above just because the
trust's corpus may revert to a person who is not disabled
after the trust ceases to have any disabled beneficiaries.

If the parents were unmarried, treated as unmarried for
federal income tax purposes, or separated by either a
divorce or separate maintenance decree, enter the name
and SSN of the parent with whom the child lived for most
of the year (the custodial parent).

Child's Investment Income
Worksheet—Line 1
Keep for Your Records

Exceptions. If the custodial parent remarried and filed a
joint return with his or her new spouse, enter the name
and SSN of the person listed first on the joint return, even
if that person is not the child's parent. If the custodial
parent and his or her new spouse filed separate returns,
enter the name and SSN of the person with the higher
taxable income, even if that person is not the child's
parent.
If the parents were unmarried but lived together during
the year with the child, enter the name and SSN of the
parent who had the higher taxable income.

1. Enter the amount from the child's Form 1040,
line 22; Form 1040A, line 15; or Form 1040NR,
line 23, whichever applies
................
2. Enter the child's earned income (defined earlier)
plus the amount of any penalty on early
withdrawal of savings from the child's Form 1040,
line 30, or Form 1040NR, line 30, whichever
applies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Subtract line 2 from line 1. Enter the result here
and on Form 8615, line 1 . . . . . . . . . . . . . . . . .

Line 1

If the child had no earned income (defined below), enter
the child's adjusted gross income from Form 1040,
line 38; Form 1040A, line 22; or Form 1040NR, line 37.

Line 2

If the child itemized deductions, enter the larger of:
$1,900, or
$950 plus the portion of the amount on Schedule A
(Form 1040), line 29 (or Form 1040NR, Schedule A,
line 15), that is directly connected with the production of
the investment income on Form 8615, line 1.

If the child had earned income, use the Child's
Investment Income Worksheet, later, to figure the amount
to enter on line 1. But use Pub. 929 instead of the
worksheet to figure the amount to enter on line 1 if the
child:
Files Form 2555 or 2555-EZ (relating to foreign earned
income),
Has a net loss from self-employment, or
Claims a net operating loss deduction.

Line 4

If the child files Form 2555 or 2555-EZ (relating to foreign
earned income), enter the amount from line 3 of the child's
Foreign Earned Income Tax Worksheet (in the Form 1040
instructions), instead of the child's taxable income.

Earned income. Earned income includes wages, tips,
and other payments received for personal services
performed.
If the child is a sole proprietor or a partner in a trade or
business in which both personal services and capital are
material income-producing factors, earned income also
includes a reasonable allowance for compensation for
personal services, but not more than 30% of the child's
share of the net profits from that trade or business (after
subtracting the deduction for the employer-equivalent

Line 6

If the parent filed a joint return, enter the taxable income
shown on that return even if the parent's spouse is not the
child's parent.
If the Foreign Earned Income Tax Worksheet (in the
Form 1040 instructions) was used to figure the parent's
tax, enter the amount from line 3 of that worksheet,
instead of the parent's taxable income.
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Instructions for Form 8615 (2012)

Line 8

2012 Line 5 Worksheet #1
Keep for Your Records

Enter on this line the total of lines 5, 6, and 7. You must
determine the amount of net capital gain and qualified
dividends included on this line before completing line 9.
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, line 16. If Schedule D is not
required, it is the amount on Form 1040, line 13; Form
1040A, line 10; or Form 1040NR, line 14.
Qualified dividends. Qualified dividends are those
dividends reported on line 9b of Form 1040 or Form
1040A or line 10b of Form 1040NR.

Use this worksheet only if line 2 of the child's Form 8615 is $1,900
and lines 3 and 5 are the same amount.

Net capital gain and qualified dividends on line 8. If
neither the child, nor the parent, nor any other child has
net capital gain, the net capital gain on line 8 is zero. (The
term “other child” means any other child whose Form
8615 uses the tax return information of the parent
identified on Lines A and B of Form 8615.)
If neither the child, nor the parent, nor any other child
has qualified dividends, the amount of qualified dividends
on line 8 is zero.
If the child, parent, or any other child has net capital
gain, figure the amount of net capital gain included on
line 8 by adding together the net capital gain amounts
included on lines 5, 6, and 7.
If the child, parent, or any other child has qualified
dividends, figure the amount of qualified dividends
included on line 8 by adding together the qualified
dividend amounts included on lines 5, 6, and 7. Use the
following discussions to find these amounts.
Net capital gain or qualified dividends on line 5. If
the child has a net capital gain or qualified dividends, use
the appropriate Line 5 Worksheet in these instructions to
find the amount included on line 5. These worksheets are
needed to adjust the child's net capital gain and qualified
dividends by the appropriate allocated amount of the
child's deductions.

Instructions for Form 8615 (2012)

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1.

Enter the child's qualified dividends

........

2.

Enter the child's net capital gain

3.

Enter the amount from the child's Form 8615,
line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

Divide line 1 by line 3. Enter the result as a
decimal (rounded to at least three places). Do
not enter more than 1.000
...............

5.

Divide line 2 by line 3. Enter the result as a
decimal (rounded to at least three places). Do
not enter more than 1.000
...............

6.

Multiply $1,900 by line 4 . . . . . . . . . . . . . . . . .

7.

Multiply $1,900 by line 5 . . . . . . . . . . . . . . . . .

8.

Qualified dividends on Form 8615, line 5.
Subtract line 6 of this worksheet from line 1 (but
do not enter less than zero or more than the
amount on Form 8615, line 5)
............

9.

Net capital gain on Form 8615, line 5.
Subtract line 7 of this worksheet from line 2 (but
do not enter less than zero or more than the
excess of Form 8615, line 5, over line 8 of this
worksheet) . . . . . . . . . . . . . . . . . . . . . . . . . .

...........

2012 Line 5 Worksheet #2
Keep for Your Records

2012 Line 5 Worksheet #3
Keep for Your Records

Use this worksheet only if line 2 of the child's Form 8615 is more than
$1,900 and lines 3 and 5 of the child's Form 8615 are the same
amount.

Use this worksheet only if the child's Form 8615, line 5, is less than
line 3.
1.

Enter the child's qualified dividends

2.

Enter the child's net capital gain . . . . . . . . . . . .

Enter the child's net capital gain . . . . . . . . . . .

3.

Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . .

3.

Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . .

4.

4.

Divide line 1 by line 3. Enter the result as a
decimal (rounded to at least three
places) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Divide line 1 by line 3. Enter the result as a
decimal (rounded to at least three places) . . . . .

5.

If the child itemized deductions, enter the child's
itemized deductions directly connected with the
production of the income on line 3
..........

5.

Enter the child's itemized deductions directly
connected with the production of the child's
qualified dividends or net capital gain . . . . . . .

6.

Multiply line 4 by line 5 . . . . . . . . . . . . . . . . . . .

7.

Subtract line 6 from line 5 . . . . . . . . . . . . . . . . .

8.

Subtract line 7 from line 2 . . . . . . . . . . . . . . . . .

9.

Subtract line 6 from line 1 . . . . . . . . . . . . . . . . .

10.

If the child can claim his or her own exemption,
enter $3,800. Otherwise, enter -0..........

11.

If the child itemized deductions, enter the child's
itemized deductions not directly connected with
the production of the income shown on line 3 of
this worksheet. Otherwise, enter the child's
standard deduction . . . . . . . . . . . . . . . . . . . . .

12.

Add lines 10 and 11 . . . . . . . . . . . . . . . . . . . . .

13.

Enter the child's adjusted gross income (Form
1040, line 38; Form 1040A, line 22; or Form
1040NR, line 37) . . . . . . . . . . . . . . . . . . . . . . .

14.

Divide line 3 by line 13. Enter the result as a
decimal (rounded to at least three places). Do not
enter more than 1.000 . . . . . . . . . . . . . . . . . . .

1.

Enter the child's qualified dividends

2.

........

6.

Multiply line 4 by line 5 . . . . . . . . . . . . . . . . . .

7.

Subtract line 6 from line 5 . . . . . . . . . . . . . . . .

8.

Subtract line 7 from line 2 . . . . . . . . . . . . . . . .

9.

Subtract line 6 from line 1 . . . . . . . . . . . . . . . .

10.

Enter the amount from the child's Form 8615,
line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.

Divide line 1 by line 10. Enter the result as a
decimal (rounded to at least three places). Do
not enter more than 1.000 . . . . . . . . . . . . . . .

12.

Divide line 2 by line 10. Enter the result as a
decimal (rounded to at least three places). Do
not enter more than 1.000 minus the amount on
line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.

Multiply $950 by line 11

15.

Multiply line 12 by line 14

14.

Multiply $950 by line 12 . . . . . . . . . . . . . . . . .

16.

Multiply line 15 by line 4 . . . . . . . . . . . . . . . . . .

15.

Qualified dividends on Form 8615, line 5.
Subtract line 13 from line 9 (but do not enter
less than zero or more than the amount on
Form 8615, line 5) . . . . . . . . . . . . . . . . . . . . .

17.

Subtract line 16 from line 15 . . . . . . . . . . . . . . .

18.

Net capital gain on Form 8615, line 5.
Subtract line 14 from line 8 (but do not enter
less than zero or more than the excess of Form
8615, line 5, over line 15 of this
worksheet) . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualified dividends on Form 8615, line 5.
Subtract line 16 of this worksheet from line 9.
Enter the result here (but do not enter less than
zero or more than the amount on Form 8615,
line 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.

Net capital gain on Form 8615, line 5. Subtract
line 17 of this worksheet from line 8 (but do not
enter less than zero or more than the excess of
Form 8615, line 5, over line 18 of this
worksheet) . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.

.................

.........

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.................

Instructions for Form 8615 (2012)

parent, or any other child. Then complete line 6 following
the worksheet instructions.
6. If the Foreign Earned Income Tax Worksheet was
used to figure the parent's tax, go to step 7 below.
Otherwise, skip steps 7, 8, and 9 below, and go to
step 10.
7. Determine whether there is a line 8 capital gain
excess. To do this, subtract from line 1 of the worksheet
the amount on line 2 of the parent's Foreign Earned
Income Tax Worksheet. Subtract the result from line 6 of
this Qualified Dividends and Capital Gain Tax Worksheet
(line 4 of the worksheet in the Form 1040A or Form
1040NR instructions). If the result is more than zero, that
amount is the line 8 capital gain excess. If the result is
zero or less, there is no line 8 capital gain excess.
8. If there is no line 8 capital gain excess, skip step 9
below and go to step 10.
9. If there is a line 8 capital gain excess, complete a
second Qualified Dividends and Capital Gain Tax
Worksheet as instructed above and in step 10 below but
in its entirety and with the following additional
modifications.
a. Reduce the amount you would otherwise enter on
line 3 (but not below zero) by the line 8 capital gain
excess.
b. Reduce the amount you would otherwise enter on
line 2 (but not below zero) by any of the line 8 capital gain
excess not used in (a) earlier.
10. Complete lines 7 through 19 (lines 5 through 16 of
the worksheet in the Form 1040A instructions or lines 5
through 17 in the Form 1040NR instructions) following the
worksheet instructions. Use the parent's filing status to
complete lines 8, 16, and 18 (lines 6, 13, and 15 of the
worksheet in the Form 1040A instructions or lines 6, 14,
and 16 of the worksheet in the Form 1040NR
instructions).

Net capital gain or qualified dividends on line 6. If
the parent has a net capital gain, its full amount is the net
capital gain included on line 6. If the parent has qualified
dividends, the full amount is the amount of qualified
dividends included on line 6.
Net capital gain or qualified dividends on line 7.
The net capital gain included on line 7 is the total of the
amounts of net capital gain included on line 5 of the other
children's Forms 8615. The qualified dividends included
on line 7 is the total of the amounts of qualified dividends
included on line 5 of the other children's Forms 8615. Find
these amounts for each other child as explained under
Net capital gain or qualified dividends on line 5 discussed
earlier. (Do not attach the other children's Forms 8615 to
this child's return.)

Line 9

Figure the tax using the Tax Table, Tax Computation
Worksheet, Qualified Dividends and Capital Gain Tax
Worksheet, Schedule D Tax Worksheet, or Schedule J
(Form 1040), whichever applies.
If line 8 includes any net capital gain or qualified
dividends, use the Qualified Dividends and Capital Gain
Tax Worksheet in the Form 1040, 1040A, or 1040NR
instructions to figure the tax, unless you have to use the
Schedule D Tax Worksheet or Schedule J (see below).
Schedule D Tax Worksheet. If the child, parent, or any
other child has to file Schedule D and line 18 or 19 of any
Schedule D is more than zero, use the Schedule D Tax
Worksheet in the Instructions for Schedule D to figure the
tax. See Pub. 929 for details on how to figure the line 9 tax
using the Schedule D Tax Worksheet.
Schedule J (Form 1040). If any farming or fishing
income (including certain amounts received in connection
with the Exxon Valdez litigation) is included on line 8, the
tax may be less if you use Schedule J. If Schedule J was
used to figure the tax on the parent's return, see Pub. 929
for details on how to figure the tax.

Enter the amount from line 19 of the Qualified
Dividends and Capital Gain Tax Worksheet (or line 16 of
the worksheet in the Form 1040A instructions or line 17 of
this worksheet in the Form 1040NR instructions) on Form
8615, line 9, and check the box on that line. Do not attach
this worksheet to the child's return.

Child files Form 2555 or 2555-EZ. If line 8 includes any
net capital gain or qualified dividends and the child or any
other child filing Form 8615 also files Form 2555 or
2555-EZ, see Pub. 929 for instructions on how to figure
the line 9 tax.

Line 10

Using the Qualified Dividends and Capital Gain Tax
Worksheet for line 9 tax. If you use the Qualified
Dividends and Capital Gain Tax Worksheet to figure the
line 9 tax, complete that worksheet as follows.
1. On line 1, enter the amount from Form 8615, line 8.
2. On line 2, enter the amount of qualified dividends
included on Form 8615, line 8. (See the instructions for
line 8.)
3. On line 3, enter the amount of the net capital gain
included on Form 8615, line 8. (See the instructions for
line 8.)
4. Complete line 4 following the worksheet
instructions.
5. If you are completing the worksheet in the Form
1040 instructions, enter on line 5 the total of the amounts,
if any, on line 4g of all Forms 4952 filed by the child,
Instructions for Form 8615 (2012)

If the parent filed a joint return, enter the tax shown on that
return even if the parent's spouse is not the child's parent.
If the Foreign Earned Income Tax Worksheet (in the
Form 1040 instructions) was used to figure the parent's
tax, enter the amount from line 4 of that worksheet,
instead of the parent's tax from Form 1040, line 44.

Line 15

Figure the tax using the Tax Table, Tax Computation
Worksheet, Qualified Dividends and Capital Gain Tax
Worksheet, Schedule D Tax Worksheet, or Schedule J,
whichever applies.
If line 14 includes any net capital gain or qualified
dividends, use the Qualified Dividends and
Capital Gain Tax Worksheet to figure this tax.
However, if the child has to file Schedule D and line 18 or

TIP

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instructions) following the worksheet instructions. Use the
child's filing status to complete lines 8, 16, and 18 of the
worksheet for Form 1040 (lines 6, 13, and 15 of the
worksheet for Form 1040A or lines 6, 14, and 16 of the
worksheet for Form 1040NR).

line 19 of the child's Schedule D is more than zero, use
the Schedule D Tax Worksheet to figure this tax instead.
See Pub. 929 for details on how to figure the line 15 tax
using the Schedule D Tax Worksheet.
Before using the Qualified Dividends and Capital Gain
Tax Worksheet to figure the line 15 tax, you will need to
know the amount of net capital gain and qualified
dividends, if any, included on line 14.

Enter the amount from line 19 of this Qualified
Dividends and Capital Gain Tax Worksheet (line 16 of the
worksheet in the Form 1040A instructions or line 17 of the
worksheet in the Form 1040NR instructions) on line 15 of
Form 8615 and check the box on that line. Do not attach
this worksheet to the child's return.

Net capital gain and qualified dividends on line 14. If
the child does not have any net capital gain or qualified
dividends, line 14 does not include any net capital gain or
qualified dividends.
If the child has net capital gain, the amount of net
capital gain included on line 14 is the amount from line 2
of the child's completed Line 5 Worksheet minus the
amount from the last line of that worksheet.
If the child has qualified dividends, the amount of
qualified dividends included on line 14 is the amount from
line 1 of the child's completed Line 5 Worksheet minus the
amount from the next to the last line of that worksheet.

Using Schedule J (Form 1040) for line 15 tax. If
line 14 includes any farming or fishing income (including
certain amounts received in connection with the Exxon
Valdez litigation), the tax may be less if you use
Schedule J. See Pub. 929 for details on how to figure the
line 15 tax using Schedule J.

Line 17

Figure the tax using the Tax Table, Tax Computation
Worksheet, Qualified Dividends and Capital Gain Tax
Worksheet, Schedule D Tax Worksheet, or Schedule J,
whichever applies.

Child files Form 2555 or 2555-EZ. If line 14 includes
any net capital gain or qualified dividends and the child
files Form 2555 or 2555-EZ, see Pub. 929 for instructions
on how to figure the line 15 tax.

If line 4 includes any qualified dividends or net capital
gain, use the Qualified Dividends and Capital Gain Tax
Worksheet to figure the tax unless the Schedule D Tax
Worksheet has to be used instead.

Using the Qualified Dividends and Capital Gain Tax
Worksheet for line 15 tax. If you use the Qualified
Dividends and Capital Gain Tax Worksheet to figure the
line 15 tax, complete that worksheet as follows.
1. On line 1, enter the amount from Form 8615,
line 14.
2. On line 2, enter the amount of the qualified
dividends included on Form 8615, line 14. (See Net
capital gain and qualified dividends on line 14, earlier.)
3. On line 3, enter the amount of the net capital gain
included on Form 8615, line 14. (See Net capital gain and
qualified dividends on line 14, earlier.)
4. Complete line 4 following the worksheet
instructions.
5. If you are completing the worksheet in the Form
1040 instructions, leave line 5 blank.
6. Complete lines 6 through 19 (lines 5 through 16 of
the worksheet in the Form 1040A instructions or lines 5
through 17 of the worksheet in the Form 1040NR

If any farming or fishing income (including certain
amounts received in connection with the Exxon Valdez
litigation) is included on line 4, the tax may be less if you
use Schedule J.
Child files Form 2555 or 2555-EZ. If line 4 includes any
qualified dividends or net capital gain and the child files
Form 2555 or 2555-EZ, see Pub. 929 for instructions on
how to figure the line 17 tax.

Line 18

If the child files Form 2555 or 2555-EZ, do not enter the
amount from Form 8615, line 18, on the child's Form
1040, line 44. Instead, enter the amount from Form 8615,
line 18, on line 4 of the child's Foreign Earned Income Tax
Worksheet (in the Form 1040 instructions). Then complete
the rest of the Foreign Earned Income Tax Worksheet to
figure the child's tax.

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Instructions for Form 8615 (2012)