U.S. Individual Income Tax Return Forms

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2023

Instructions for Form 8814

Department of the Treasury
Internal Revenue Service

Parents’ Election To Report Child’s Interest and Dividends

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Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments

For the latest information about developments related to Form 8814
and its instructions, such as legislation enacted after they were
published, go to IRS.gov/Form8814.

General Instructions

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.

Which Parent's Return To Use

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 2023. "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 2023 was less than $12,500.
• The child is required to file a 2023 return.
• The child does not file a joint return for 2023.
• There were no estimated tax payments for the child for 2023
(including any overpayment of tax from his or her 2022 return
applied to 2023 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.
Note. The amounts at $1,250 and below are not taxed when using
this election. See Rate may be higher for more information.
Full-time student. A full-time student is your 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, 2005, is
considered to be age 19 at the end of 2023. You cannot make this
election for such a child unless the child was a full-time student.
A child born on January 1, 2000, is considered to be age 24 at
the end of 2023. 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 on your return. You
can make the election for one or more children and not for others.
Parents who qualify to make the election. You qualify to make
this election if you file Form 1040, 1040-SR, or 1040-NR and any of
the following apply.
• You are filing a joint return for 2023 with the child’s other parent.
• You and the child’s other parent were married to each other but
file separate returns for 2023 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
Oct 19, 2023

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
don’t file a joint return, you qualify to make the election only if you
had higher taxable income than your new spouse.
See Which Parent's Return To Use below for more information
about which parent’s return to use.

If a child’s parents are married to each other and file a joint return,
use the joint return when electing to report the child’s interest and
dividend income on their return. For other situations when the
parents do not file a joint return, see Parents Who Don t File a Joint
Return, next.

Parents Who Don’t File a Joint Return

For parents who don’t file a joint return and are electing to report the
child’s interest and dividend income on their return, the following
discussions explain which parent's tax return must be used to figure
the tax.

Only the parent whose tax return is used can make the election
described earlier under Parents who qualify to make the election.

Parents are married. If the child's parents file separate returns, use
the return of the parent with the greater taxable income.
Parents not living together. If the child's parents are married to
each other but not living together, and the parent with whom the
child lives (the custodial parent) is considered unmarried, use the
return of the custodial parent. If the custodial parent isn’t considered
unmarried, use the return of the parent with the greater taxable
income.
For an explanation of when a married person living apart from his
or her spouse is considered unmarried, see Head of Household in
Pub. 501.
Parents are divorced. If the child's parents are divorced or legally
separated, and the parent who had custody of the child for the
greater part of the year (the custodial parent) hasn’t remarried, use
the return of the custodial parent.
Custodial parent remarried. If the custodial parent has
remarried, the stepparent (rather than the noncustodial parent) is
treated as the child's other parent. Therefore, if the custodial parent
and the stepparent file a joint return, use that joint return. Don’t use
the return of the noncustodial parent.
If the custodial parent and the stepparent are married, but file
separate returns, use the return of the one with the greater taxable
income. If the custodial parent and the stepparent are married but
not living together, the earlier discussion under Parents not living
together applies.
Parents never married. If a child's parents have never been
married to each other, but lived together all year, use the return of
the parent with the greater taxable income. If the parents didn’t live
together all year, the rules explained earlier under Parents are
divorced apply.
Widowed parent remarried. If a widow or widower remarries, the
new spouse is treated as the child's other parent. The rules
explained earlier under Custodial parent remarried apply.

Cat. No. 92918Z

Note. If you file Form 8814 with your income tax return to report
your child’s foreign financial account, you have an interest in the
assets from that account and may be required to file Form 8938,
Statement of Specified Foreign Financial Assets. See the Form 8938
instructions for details.

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 $1,850 if the child is blind,
• Penalty on early withdrawal of child’s savings, and
• Itemized deductions such as the child’s charitable contributions.

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.

Reduced deductions or credits. If you use Form 8814, your
increased adjusted gross income may reduce certain deductions or
credits on your return, including the following.
• Deduction for contributions to a traditional IRA.
• Deduction for student loan interest.
• Itemized deductions for medical expenses and casualty and theft
losses.
• Credit for child and dependent care expenses.
• Child tax credit.
• Education tax credits.
• Earned income credit.

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Specific Instructions

Name and social security number (SSN). If you are filing a joint
return, enter both names but enter the SSN of the person whose
name is shown first on the return.

Taxable and Tax-Exempt Interest

Penalty for underpayment of estimated tax. If you make this
election for 2023 and didn't have enough tax withheld or pay enough
estimated tax to cover the tax you owe, you may be subject to a
penalty. If you plan to make this election for 2024, you may need to
increase your federal income tax withholding or your estimated tax
payments to avoid the penalty. See Pub. 505 for more information.

Line 1a. Enter all taxable interest income your child received in
2023. 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” (nominee distribution)
on the dotted line next to line 1a. Do not include amounts received
as a nominee in the total for line 1a.
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.

Rate may be higher. If your child received qualified dividends or
capital gain distributions, you may pay up to $125 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 $1,250
and $2,500 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%
because of the preferential tax rates for qualified dividends and
capital gain distributions.
To figure the most beneficial tax on your child's income, first
figure the tax on your child’s income as if they are 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.

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.

Alternative minimum tax (AMT). 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 AMT. 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.

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, earlier.

Ordinary Dividends

Net Investment Income Tax (NIIT). For purposes of figuring any
NIIT liability of the parents on Form 8960, the following rules apply.
1. All income reported on line 12 is included in the parents’
modified adjusted gross income.
2. All net investment income included on line 12 (except for
Alaska Permanent Fund dividends) is included in the parents’ net
investment income.

Line 2a. Enter the ordinary dividends your child received in 2023.
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.
Ordinary dividends received as nominee. 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.

For more information on NIIT, go to IRS.gov/NIIT.
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.

Qualified Dividends
Line 2b. Enter all qualified dividends your child received in 2023.
Qualified dividends are those dividends normally reported on Form
1040, 1040-SR, or 1040-NR, line 3a. They 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. For detailed information about qualified dividends, see
Pub. 550.
Enter the child's qualified dividends on Form 8814, line 2b. But
don't include this amount on the parent’s Form 1040, 1040-SR, or
1040-NR, line 3a. Instead, include the amount from Form 8814,
line 9, on Form 1040, 1040-SR, or 1040-NR, line 3a. (The amount on
Form 8814, line 9, may be less than the amount on Form 8814,
line 2b, because lines 7 through 12 of the form divide the $2,500
base amount on Form 8814, line 5, between the child's qualified

Foreign accounts and trusts. You must complete Schedule B
(Form 1040), Part III, and file it with your tax return if your child:
1. Had a foreign financial account; or
2. Received a distribution from, or was the grantor of, or
transferor to, a foreign trust.
Enter “Form 8814” on the dotted line next to line 7a or line 8,
whichever applies. Complete line 7b if applicable.

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Instructions for Form 8814

Example. Fred is 6 years old. In 2023, he received dividend
income of $2,600, which included $1,990 of ordinary dividends and
a $610 capital gain distribution from a mutual fund. (None of the
distributions were reported on Form 1099-DIV as unrecaptured
section 1250 gain, section 1202 gain, or collectibles (28% rate)
gain.) All of the ordinary dividends are qualified dividends. He has
no other income and isn’t subject to backup withholding. No
estimated tax payments were made under his name and SSN.
Fred's parents elect to include Fred's income on their tax return
instead of filing a return for him.
They figure the amount to report on Form 1040, lines 3a and 3b,
and the amount to report on their Schedule D, line 13, as follows.
They leave lines 1a and 1b of Form 8814 blank because Fred
doesn’t have any interest income. They enter his ordinary dividends
of $1,990 on lines 2a and 2b because all of Fred's ordinary
dividends are qualified dividends. They enter the amount of Fred's
capital gain distributions, $610, on line 3. Next, they add the
amounts on lines 1a, 2a, and 3 and enter the result, $2,600, on
line 4.
They subtract the base amount on line 5, $2,500, from the
amount on line 4, $2,600, and enter the result, $100, on line 6. This
is the total amount from Form 8814 to be reported on their return.
Next, they figure how much of this amount is qualified dividends and
how much is capital gain distributions.
• They divide the amount on line 2b, $1,990, by the amount on
line 4, $2,600. They enter the result, 0.77, on line 7.
• They divide the amount on line 3, $610, by the amount on line 4,
$2,600. They enter the result, 0.23, on line 8.
• They multiply the amount on line 6, $100, by the decimal on
line 7, 0.77, and enter the result, $77, on line 9.
• They multiply the amount on line 6, $100, by the decimal on
line 8, 0.23, and enter the result, $23, on line 10.
• They include the amount from line 9, $77, on lines 3a and 3b of
their Form 1040 and enter “Form 8814 — $77” on the dotted lines
next to lines 3a and 3b. They include the amount from line 10, $23,
on line 13 of their Schedule D (Form 1040) and enter “Form 8814 —
$23” on the dotted line next to Schedule D, line 13.

dividends, capital gain distributions, and other interest and dividend
income, reducing each of those amounts.)
Note. Don't include these dividends on Form 8814, line 12; or
Schedule 1 (Form 1040), line 8z.

Capital Gain Distributions
Line 3. Enter the capital gain distributions your child received in
2023. Capital gain distributions should be shown in box 2a of Form
1099-DIV.
The amount of these distributions that is added to your income
must be reported on Schedule D (Form 1040), Capital Gains and
Losses, line 13, or, if you aren't required to file Schedule D, on Form
1040, 1040-SR, or 1040-NR, line 7, whichever applies.
This is the amount on Form 8814, line 10. (The amount on Form
8814, line 10, may be less than the amount on Form 8814, line 3,
because lines 7 through 12 of the form divide the $2,500 base
amount on Form 8814, line 5, between the child's qualified
dividends, capital gain distributions, and other interest and dividend
income, reducing each of those amounts.)

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Note. Don’t include these dividends on Form 8814, line 12; or
Schedule 1 (Form 1040), line 8z.

Types of capital gain distributions. Capital gain distributions are
organized into the following three subcategories.
• Collectibles (28% rate) gain distributions.
• Unrecaptured section 1250 gain distributions.
• Section 1202 gain distributions.

Collectibles (28% rate) gain distributions. If any of the child's
capital gain distributions are reported on Form 1099-DIV as
collectibles (28% rate) gain, you must determine how much to also
include on line 4 of the 28% Rate Gain Worksheet in the instructions
for Schedule D, line 18. Multiply the child's capital gain distribution
included on Schedule D, line 13, by a fraction. The numerator is the
part of the child's total capital gain distribution that is collectibles
(28% rate) gain. The denominator is the child's total capital gain
distribution. Enter the result on line 4 of the 28% Rate Gain
Worksheet.

Additional Instructions

Unrecaptured section 1250 gain distributions. If any of the
child's capital gain distributions are reported on Form 1099-DIV as
unrecaptured section 1250 gain, you must determine how much to
include on line 11 of the Unrecaptured Section 1250 Gain
Worksheet in the instructions for Schedule D, line 19. Multiply the
child's capital gain distribution included on Schedule D, line 13, by a
fraction. The numerator is the part of the child's total capital gain
distribution that is unrecaptured section 1250 gain. The denominator
is the child's total capital gain distribution. Enter the result on the
Unrecaptured Section 1250 Gain Worksheet, line 11.

Line 9. Include this amount on Form 1040, 1040-SR, or 1040-NR,
lines 3a and 3b. Enter “Form 8814” and this amount on the dotted
line next to those lines unless you file Schedule B (Form 1040).
If you file Schedule B, include this amount on line 5 and identify it
as from “Form 8814.” Complete Schedule B as instructed. Also
include this amount on Form 1040, 1040-SR, or 1040-NR, line 3a.
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 (Form 1040), line 13;
or Form 1040, 1040-SR, or 1040-NR, line 7. 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 7 of Form 1040, 1040-SR, or 1040-NR.
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% rate) gain, see Types of capital gain
distributions, earlier, to locate the instructions for the type(s) of
capital gain distributions your child has and for details on the
amount(s) to report on Schedule D.

Section 1202 gain distributions. If any of the child's capital gain
distributions are reported as section 1202 gain (gain on qualified
small business stock) on Form 1099-DIV, part or all of that gain may
be eligible for the section 1202 exclusion. (For information about the
exclusion, see chapter 4 of Pub. 550.) To figure that part, multiply the
child's capital gain distribution included on Schedule D, line 13, by a
fraction. The numerator is the part of the child's total capital gain
distribution that is section 1202 gain. The denominator is the child's
total capital gain distribution. Your section 1202 exclusion is
generally 50% of the result, but may be subject to a limit. In some
cases, the exclusion is more than 50%. See the Instructions for
Schedule D for details and information on how to report the
exclusion amount.)
Capital gain distributions received as nominee. 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.

Instructions for Form 8814

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 Schedule 1
(Form 1040), line 8z. Enter “Form 8814” and the total of the line 12
amounts in the space on that line.
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,
1040-SR, or 1040-NR, line 16. Be sure to check box 1 on Form
1040, 1040-SR, or 1040-NR, line 16.

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