Children's Investment Income
Keep these indicators in mind when gathering your family’s tax information this season:
- Investment Income includes interest, dividends, and capital gains (stock sales)
- The threshold for tax at the parent’s rate is $1,900 in investment income. Any investment income greater than $1,900 must be taxed at the parent’s rate.
- The child does not have to file a separate return if they had only interest and dividend income. That income can be included on a schedule on the parent’s return.
- The age requirements for children who’s investment income must be taxed at their parent’s rate are as follows:
- All children under age 18
- Children under age 19 who are claimed as a dependant by their parents because they receive more than half their support from their parents.
- Children under age 24 who were full time students and are claimed as a dependant by their parents because they receive more than half their support from their parents.
These requirements are easily overlooked so please provide us with all of your family’s investment statements so that we can determine whether the additional tax should be assessed on your children’s income.