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June 1, 2019
Question

Do I have to fill out the form 8615 ("kiddie tax") in 2018 if I am a graduate student who received a taxable scholarship/fellowship?

  • June 1, 2019
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1 reply

Employee
June 1, 2019

No, the kiddie tax applies if the only income you (as a child) had was investment income such as interest and dividends, including capital gains distributions and Alaska Permanent Fund dividends.  See link below that explains more about Form 8615:

https://ttlc.intuit.com/replies/3302004

April 5, 2020

Are you sure? I am trying to figure this out myself. The  instructions for form 8615 includes taxable scholarship in the definition of unearned income.  To me, that implies that if it is greater than $2200, then yes, it has to be on form 8615. Also, Turbotax is giving me an error indicating I need to complete form 8615. The only unearned income my son has is the scholarship. I have been googling and other tax info sites also say it is subject to the kiddie tax. I manually changed the 8615 form - changing the answer to the question about investment income greater than $2200 from yes to no, but that didn't help. The error came right back. 

macuser_22
Employee
April 5, 2020

@gls61 wrote:

Are you sure? I am trying to figure this out myself. The  instructions for form 8615 includes taxable scholarship in the definition of unearned income.  To me, that implies that if it is greater than $2200, then yes, it has to be on form 8615. Also, Turbotax is giving me an error indicating I need to complete form 8615. The only unearned income my son has is the scholarship. I have been googling and other tax info sites also say it is subject to the kiddie tax. I manually changed the 8615 form - changing the answer to the question about investment income greater than $2200 from yes to no, but that didn't help. The error came right back. 


Taxable scholarships are scholarships that exceed tuition (i,e, the 1098-T box 5 is more then box 1.  The taxable part would appear on the 1040 line 1 with "SCH" next to it.)

 

Per IRS Pub 17 page 201

https://www.irs.gov/pub/irs-pdf/p17.pdf

 

Unearned income defined. Unearned income
is generally all income other than salaries,
wages, and other amounts received as pay
for work actually done. It includes taxable interest,
dividends, capital gains (including capital
gain distributions), unemployment compensation,
taxable scholarship and fellowship grants
not reported on Form W-2, the taxable part of
social security and pension payments, and certain
distributions from trusts. Unearned income
includes amounts produced by assets the child
obtained with earned income (such as interest
on a savings account into which the child deposited
wages).

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**