Increase in age of children whose investment income is taxed at parent’s rate. The rules regarding the age of a child whose investment income may be taxed at the parent’s tax rate will change for 2008. These rules will continue to apply to a child under age 18 at the end of the year but, beginning in 2008, will also apply to:
- A child who is age 18 at the end of the year and whose earned income is not more than half of the child’s support, and
- A student who is under age 24 at the end of the year and whose earned income is not more than half of the child’s support.
Form 8615, Tax for Children Under Age 18 With Investment Income of More Than $1,700 is used to figure the child’s tax.
Increase in age of children whose investment income is taxed at parent’s rate. A student is a child who during any part of 5 calendar months of the year was enrolled as a full-time student at a school, or took a full-time, on-farm training course given by a school or a state, county, or local government agency. A school includes a technical, trade, or mechanical school. It does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet.
The amount of taxable investment income these children can have without it being subject to tax at the parent’s rate has increased to $1,800 for 2008. For 2007, the amount was $1,700.
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