The choice to file Form 8814 Parents’ Election To Report Child’s Interest and Dividends with the parents' return or Form 8615 Tax for Certain Children Who Have Unearned Income with the child's return is one to be made by the preparer of the return.
Per IRS Publication 929 Tax Rules for Children and Dependents, on page 9:
The two rules that follow may affect the tax on the unearned income of certain children.
For these rules, the term “child” includes a legally adopted child and a stepchild. These rules apply whether or not the child is a dependent.
These rules don’t apply if neither of the child's parents were living at the end of the year.
To determine where to claim your child's investment income and what form to use for that reporting:
To enter the amounts in the TaxAct® program which will transfer to Form 8615:
Per IRS Instructions for Form 8615 on page 1:
Purpose of Form
Use Form 8615 to figure your tax on unearned income over $2,200 if you are under age 18, and in certain situations if you are older. See Who Must File, later.
For Form 8615, “unearned income” includes all taxable income other than earned income. Unearned income includes taxable interest, ordinary dividends, capital gains (including capital gain distributions), rents, royalties, etc. It also includes taxable social security benefits, pension and annuity income, taxable scholarship and fellowship grants not reported on Form W-2, unemployment compensation, alimony, and income (other than earned income) received as the beneficiary of a trust.
Who Must File
Form 8615 must be filed for anyone who meets all of the following conditions.
These rules apply if you’re legally adopted or a stepchild. These rules also apply whether or not you’re a dependent. These rules don’t apply if neither of your parents were living at the end of the year.
Support. Your support includes all amounts spent to provide you with food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. To figure your support, count support provided by you, your parents, and others. However, a scholarship you received isn’t considered support if you’re a full-time student. For details, see Pub. 501, Dependents, Standard Deduction, and Filing Information.
TIP: Your parent may be able to elect to report your interest, ordinary dividends, and capital gain distributions on his or her return. If your parent makes this election, you won’t have to file a return or Form 8615. However, the federal income tax on your income, including qualified dividends and capital gain distributions, may be higher if this election is made. For more details, see Form 8814, Parents’ Election To Report Child's Interest and Dividends.
To enter the amounts in the TaxAct program which will transfer to Form 8814:
If your child is required to file a return, you may elect to include your child's interest and dividend income on your return if ALL of the following conditions are met, per IRS Publication 929 Tax Rules for Children and Dependents, on page 9:
Parent's Election To Report Child's Interest and Dividends (Form 8814)
You may be able to elect to include your child's interest and dividend income (including capital gain distributions) on your tax return. If you do, your child won't have to file a return.
You can make this election only if all the following conditions are met.
You, the parent, must also qualify. Per General Instructions for Form 8814 on page 3:
Parents who qualify to make the election. You qualify to make this election if you file Form 1040, 1040-SR, or 1040-NR and any of the following apply.
Note: If you and the child’s other parent were not married but lived together during the year with the child, you qualify to make the election only if you are the parent with the higher taxable income.
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.