IRS Instruction 8814 – IRS Forms, Instructions, Pubs 2026

Are you a parent wondering if you can report your child’s interest and dividend income on your own tax return to avoid filing a separate return for them? IRS Form 8814 (Parents’ Election To Report Child’s Interest and Dividends) lets eligible parents do exactly that for tax year 2025.

This election simplifies filing for families with children who have modest unearned income (typically from savings accounts, CDs, or mutual funds). However, it is not always the best choice—especially if your child qualifies for lower tax rates on qualified dividends or capital gains.

Download the official 2025 Instructions for Form 8814 PDF here:
https://www.irs.gov/pub/irs-pdf/i8814.pdf (Revised October 8, 2025)
Download the Form 8814 itself here:
https://www.irs.gov/pub/irs-pdf/f8814.pdf

Who Can Use Form 8814? (Eligibility Requirements)

You can make the election only if all of these conditions are met for tax year 2025:

  • Your child was under age 19 at the end of 2025 (or under age 24 if a full-time student for at least 5 calendar months).
  • Your child’s only income is from interest, dividends (including qualified dividends and capital gain distributions), and Alaska Permanent Fund dividends.
  • Your child’s gross income is less than $13,500.
  • Your child is required to file a 2025 return (generally if unearned income ≥ $2,700).
  • Your child did not file a joint return.
  • No estimated tax payments were made for the child (including prior-year overpayments applied to 2025).
  • No federal income tax was withheld from the child’s income.
  • You (the parent) are filing Form 1040, 1040-SR, or 1040-NR.
  • If married filing jointly → use the joint return.
    If not → use the return of the parent with the higher taxable income (special rules apply for divorced/separated/remarried parents; the custodial parent generally qualifies).

A separate Form 8814 is required for each qualifying child.

Qualifying Income and Limits

Only interest + ordinary dividends + capital gain distributions qualify.
Gross income must be under $13,500 (2025 threshold).
The first $2,700 of the child’s investment income is effectively tax-free under this election (the “base amount”).
Any amount above $2,700 is added to the parent’s taxable income and taxed at the parent’s marginal rate.

How to Complete Form 8814 – Step-by-Step (2025 Instructions)?

  1. Line 1a – Child’s taxable interest (Form 1099-INT, Box 1)
  2. Line 1b – Child’s tax-exempt interest (Form 1099-INT, Box 8)
  3. Line 2a – Child’s ordinary dividends (Form 1099-DIV, Box 1a)
  4. Line 2b – Child’s qualified dividends (Form 1099-DIV, Box 1b)
  5. Line 3 – Child’s capital gain distributions (Form 1099-DIV, Box 2a)
  6. Line 4 – Total = 1a + 2a + 3
  7. Line 5 – Enter $2,700 (2025 base amount)
  8. Line 6 – Taxable portion = Line 4 – $2,700 (if zero or negative, stop)
  9. Lines 7 & 8 – Prorate qualified dividends and capital gains from Line 6
  10. Line 9 → Report qualified dividends on your Form 1040, line 3a/3b (write “Form 8814”)
  11. Line 10 → Report capital gain distributions on Schedule D or Form 1040, line 7 (write “Form 8814”)
  12. Line 12 → Additional tax on the child’s income (goes on Schedule 1, line 8z or Form 1040, line 16)
  13. Line 15 → Total additional tax (if multiple children) → Form 1040, line 16 (check box 1)

Tip: Qualified dividends and long-term capital gains retain their preferential rates when reported on your return.

Benefits vs. Drawbacks – Should You Make the Election?

Benefits

  • Child avoids filing their own return
  • Simpler paperwork for modest amounts
  • No need to file Form 8615 (kiddie tax) separately

Drawbacks

  • You may pay up to $135 more in tax if the child has qualified dividends/capital gains (they would otherwise be taxed at 0% on the first $1,350–$2,700).
  • Increases your AGI → can reduce or eliminate:
    • IRA contribution deduction
    • Student loan interest deduction
    • Child tax credit, education credits, EITC, etc.
  • May trigger Alternative Minimum Tax (AMT) or Net Investment Income Tax (NIIT)
  • Investment interest expense deduction may be limited

Always compare the tax on your return (with election) vs. the tax if the child files separately using Form 8615.

Important Warnings & Special Situations

  • Foreign financial accounts or trusts → complete Schedule B, Part III and possibly Form 8938
  • Private activity bond interest → may trigger AMT (Form 6251)
  • Change of child’s address → file Form 8822
  • Underpayment penalty risk if you did not increase withholding or estimated payments

Official IRS Resources (2025)

Bottom line: Form 8814 is a useful shortcut for many families, but run the numbers both ways. When in doubt, consult a tax professional or use tax software that automatically compares both scenarios.

This article reflects the 2025 tax year instructions published by the IRS. Always verify the latest version on IRS.gov before filing.