IRS Form 8814: Reporting Your Child’s Income as an Expat
Key Takeaways
- IRS Form 8814 lets expat parents report a child’s interest and dividend income on their tax return.
- The form only applies to specific investment income, such as interest, dividends, and capital gain distributions.
- A child with wages, self-employment income, rental income, or certain foreign investments may need to file a separate return.
- For 2025, your child’s gross income must stay under $13,500 to use the election.
- Form 8814 can simplify filing, but it can increase your tax or reduce certain credits.
- Filing a separate return for your child may produce a better tax result in certain cases.
What Is IRS Form 8814?
Also called Parents’ Election To Report Child’s Interest and Dividends, or the kiddie tax form, allows expat parents to report their child’s investment income on their own U.S. tax return.
Parents use this form when their child has certain types of investment income and would otherwise need to file a separate tax return. Instead of preparing another Form 1040 for your child, you report your child’s eligible income on Form 8814 and attach it to your return.
The IRS describes Form 8814 as the form parents use to report a child’s income on their return, so the child does not have to file a separate return. Although the form simplifies the filing, it may result in parents owing higher taxes, so please be aware.
Who Can Use IRS Form 8814?
Use the IRS Form 8814 only when your child meets all the following IRS conditions. If one rule does not apply, you may need to file a separate return for your child.
For the current year, the child must generally meet these conditions:
- Your child was under age 19 at the end of the year, or under age 24 if a full-time student.
- The child’s only income came from interest, dividends, and capital gain distributions.
- The child’s gross income was less than $13,500.
- Your child did not have any estimated tax payments for the year.
- Your child had no prior-year overpayment applied to the current year.
- The child had no federal income tax withheld under backup withholding rules.
- Your child does not file a joint return.
The IRS Form 8814 instructions list these eligibility rules and state that the child’s income must stay below the form’s income limit.
If you have two or more children who meet the conditions above, a separate Form 8814 must be filed for each. However, you’re also free to use Form 8814 for one child and file a separate return for another. You don’t have to make the same choice for every child.
Which Parent Can Make The Election?
Only one parent may make the election. If you file jointly with the child’s other parent, attach Form 8814 to the joint return.
If you don’t file jointly or are divorced from the child’s other parent, the parent who can make the election may depend on who has custody and/or higher taxable income.
In many cases, you can use the Form 8814 if:
- You’re considered the custodial parent after divorce or separation.
- You have a higher taxable income than your child’s other parent
- You’re a remarried custodial parent and file jointly with your new spouse.
If you file separately with your new spouse, you must have a higher taxable income in order to qualify to make an election.
What Income Can You Report On IRS Form 8814?
A parent can report the following income types on IRS Form 8814:
- Taxable interest
- Tax-exempt interest
- Ordinary dividends
- Qualified dividends
- Capital gain distributions
- Alaska Permanent Fund dividends
This income usually comes from custodial accounts, savings accounts, brokerage accounts, mutual funds, or gifts from grandparents that produce interest or dividends.
Any income earned outside the above categories, like wages from a summer job or online work, may not qualify for Form 8814 and require your child to file a separate tax return instead.
How Does The Kiddie Tax Work With Form 8814?
The kiddie tax is intended to deter parents from moving investment income to their children in order to take advantage of reduced tax rates. Without this restriction, parents might transfer income-producing assets to their child’s name and pay taxes at the child’s lower rate.
Here’s how the rules apply for 2026:
- The first $1,350 of a child’s unearned income generally does not get taxed.
- The next $1,350 can be taxed at 10% when reported on IRS Form 8814.
- Income above $2,700 generally gets taxed at the parent’s rate.
Using the IRS Form 8814 can cost parents up to $135 more when a child has qualified dividends or capital gain distributions. That happens because the 10% tax that’s applied to income between $1,350 and $2,700. On a separate return, the same income may be subject to a 0% rate.
While it can save time in filing, it doesn’t always save tax. This doesn’t mean you should avoid using the form every time. However, you should compare both choices before you file.
When Can IRS Form 8814 Cost More?
Using Form 8814 increases your adjusted gross income (AGI) by the amount of the child’s reported income. This can reduce or phase out certain AGI-based deductions and credits (such as education credits, student loan interest deduction, or other income-sensitive benefits).
It may make sense to use the form if the child has a modest amount of investment income, because it may not affect your AGI that much, and you may benefit from simple filing. However, if your child has a higher investment income, it may be more favorable to file a separate return for your child, especially when your income already sits near a phaseout range
IRS Form 8814 vs. Form 8615
Taxpayers often compare IRS Form 8814 with Form 8615.
Form 8814 places eligible child investment income on the parent’s return. Form 8615 applies when the child files a separate return and must calculate tax on certain unearned income.
Here’s a quick comparison between the two forms:
| Factor | Form 8814 | Form 8615 |
| Who files? | Parent reports the child’s income | Child files a separate return |
| Best for | Small, simple investment income | Larger or more complex unearned income |
| Best for | Interest, dividends, capital gain distributions | Broader unearned income |
| Parent income impact | Increases parent adjusted gross income | Does not directly increase parent adjusted gross income |
| Foreign reporting | May complicate the parent’s return | May complicate the parent’s return |
| Tax result | Simpler, but not always cheaper | More paperwork, but may reduce tax |
Form 8615 generally applies when a child has more than $2,700 of unearned income and meets the kiddie tax rules.
What Expat Tax Issues Can Affect Form 8814?
A child’s investment income can trigger several foreign reporting issues.
Does Your Child Have a Foreign Bank or Brokerage Account?
If your child owns or has authority over foreign financial accounts, you may need to look into the Foreign Bank Account Report, or the FBAR.
This report applies when foreign financial accounts exceed $10,000 in total at any point during the year. The threshold looks at the combined highest balances, not the year-end balance.
Using IRS Form 8814 doesn’t relieve your child of FBAR responsibility. If your child meets the FBAR filing threshold, the child may still need a separate FBAR filing.
Does Form 8938 Apply?
Foreign Account Tax Compliance Act (FATCA)reporting may also apply. This reporting usually happens on Form 8938, Statement of Specified Foreign Financial Assets.
FATCA has higher thresholds than the FBAR. The thresholds can also differ for taxpayers living abroad. Still, your child’s foreign accounts and foreign assets may need review.
If you report your child’s income on your return, you should check whether those assets affect your own foreign asset reporting.
Form 8814 isn’t a shortcut for foreign reporting and doesn’t automatically handle foreign account disclosure.
Was Foreign Tax Withheld?
If a foreign bank or brokerage withheld tax from your child’s dividends or interest, you may be able to claim the Foreign Tax Credit.
The credit can reduce double taxation when both the foreign country and the United States tax the same income. If you report your child’s foreign dividends through IRS Form 8814, you may need to account for those foreign taxes on your return.
Did Your Child Own a Foreign Mutual Fund?
Foreign mutual funds and foreign exchange-traded funds can create a difficult U.S. tax issue.
These investments may be subject to Passive Foreign Investment Company rules. Those rules can require Form 8621 and special tax calculations.
If your child owns foreign funds, be careful with using IRS Form 8814 without a professional review.
Frequently Asked Questions
No. You cannot use IRS Form 8814 if your child has wages or other earned income. In that case, your child may need to file a separate tax return.
Not always. Form 8814 can simplify filing, but it can increase your tax or reduce credits. A separate child return may work better when your child has qualified dividends, capital gain distributions, foreign accounts, or foreign investments.
IRS Form 8814 does not directly affect the Foreign Earned Income Exclusion because that exclusion applies to earned income. Your child’s investment income does not qualify as earned income. However, the income reported on Form 8814 may still affect other parts of your tax return.
Yes. You must file a separate IRS Form 8814 for each child whose income you report on your return. You can choose Form 8814 for one child and file a separate return for another.
Yes, expat parents can use IRS Form 8814 when the child qualifies under the same rules that apply to U.S.-based families. However, expat parents must also check foreign accounts, foreign tax credits, foreign currency, and foreign investment reporting. These extra issues can make a separate child return the better choice.
Yes. You can use IRS Form 8814 for one child and file a separate return for another child. You must complete a separate Form 8814 for each child whose income you choose to report.
Work With An Expat Tax Specialist Before You File
IRS Form 8814 can save time when your child has simple investment income. For expat parents, a careful review is required before deciding to use the form.
Foreign accounts, foreign dividends, and foreign investment funds can have a big impact on your taxes. Filing the wrong way can cost you more money and lead to loss of tax savings.
At Tax Samaritan, we help U.S. expat families compare their filing options and choose the approach that fits their full tax picture. If your child has U.S. or foreign investment income, request a tax preparation quote today and let an expat tax specialist review the best path before you file.
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Every effort has been made to provide accurate and current tax information. This article is not a substitute for professional tax advice based on your individual circumstances. Tax law changes frequently. Please consult a qualified tax professional before making decisions based on this content.
