Does a child have to file a tax return if only income is interest income less than $1200.?
The child return must be filed when the unearned income (interest, dividends, capital gains) is more than $850. Either a separate return can be file or Parents can elect to include it in their own return. Parent can choose to include the child’s interest and dividends on the parent’s return if certain requirements are met. Use Form 8814, Parents’ Election To Report Child’s Interest and Dividends, for this purpose. Or else a separate return for the child can be filed. If child’s investment income is less than $1700 (figure for 2006; for 2007 is should be slightly more), it will be taxed at child’s tax rate.
