Tax return filing for children tax FAQs

When does my child need to file a tax return to report investment income?

If your child had investment income for 2020, a return will need to be filed if any of the following apply:

• The child's unearned income was over $1,100
• The child's earned income was over $12,400
• The child's gross income was more than $12,400

Unearned income includes taxable interest, ordinary dividends, and capital gain distributions. It also includes unemployment compensation, taxable social security benefits, pensions, annuities, and distributions of unearned income from a trust.

Earned income includes salaries, wages, tips, professional fees, and taxable scholarship and fellowship grants.

Gross income is the total of your unearned and earned income.

See the Instructions for Form 1040 for more information on who must file a return.

However, you may elect to report your child’s unearned income on your return. You and your child must meet certain conditions to qualify for this election. See IRS Publication 929—Tax Rules for Children and Dependents for more information.