Parent's Election to Report Child's Interest and Dividends (Form 8814, 2026)

Measure	Result
Total extra tax on parent's return	$861
Election available Yes, if the income is only interest and dividends and no tax was withheld or paid
Added to parent's income (Form 8814 line 6)	$3,300
Tax on child's income from $1,350 to $2,700 (10%) Maximum $135	$135
Parent's extra tax at parent's rates	$726

Measure

Result

Total extra tax on parent's return

$861

Election available

Yes, if the income is only interest and dividends and no tax was withheld or paid

Added to parent's income (Form 8814 line 6)

$3,300

Tax on child's income from $1,350 to $2,700 (10%)

Maximum $135

$135

Parent's extra tax at parent's rates

$726

The formulas

Eligible when the child's gross income is more than $1,350 and less than $13,500 (2026)
Added to parent's income = child's income - $2,700
Child tax line = 10% x lesser of $1,350 or (income - $1,350)
Parent's extra tax = tax(parent TI + added) - tax(parent TI)

How it works

Rev. Proc. 2025-32 sets the 2026 parental election range: the child's gross income must be more than $1,350 and less than $13,500. The income must be only interest and dividends, including capital gain distributions and Alaska Permanent Fund dividends.

The first $1,350 is not taxed, the next $1,350 is taxed at 10%, and the rest is added to the parent's income. The election saves filing a return for the child, but it raises the parent's AGI, which affects other limits on the parent's return.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Who can elect?

A parent of a child under 19 at year end, or under 24 if a full-time student, whose only income is interest and dividends, with no estimated payments and no withholding.

Is it cheaper than Form 8615?

Not always. Both methods leave the first $1,350 untaxed and tax the next $1,350 at 10%. The election raises the parent's AGI and gives up deductions the child could take on a separate return. Compare both before you elect.

How are qualified dividends treated?

Form 8814 lines 7 to 10 keep the qualified dividend and capital gain character on the parent's return. This tool taxes the added amount at ordinary rates.

Sources

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