This revision of the Instructions for Form 8615 reflects the Tax Technical Corrections Act of 2007, which has changed the instructions for a child or parent who files Form 2555 or 2555-EZ. See the instructions for lines 4, 6, 9, 10, 15, 17, and 18.

For children under age 18, investment income over $1,700 is taxed at the parent's rate if the parent's rate is higher than the child's. If the child's investment income is more than $1,700, use Form 8615 to figure the child's tax.

For Form 8615, “investment income” includes all taxable income other than earned income as defined on this page. Investment 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, and income (other than earned income) received as the beneficiary of a trust.

Form 8615 must be filed for any child who meets the following conditions.

The parent may be able to elect to report the child's interest, ordinary dividends, and capital gain distributions on the parent's return. If the parent makes this election, the child will not have to file a return or Form 8615. However, the federal income tax on the child's 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.

For more details, see Pub. 929, Tax Rules for Children and Dependents.

If the parent's taxable income or filing status or the net investment income of the parent's other children is not known by the due date of the child's return, reasonable estimates can be used. Enter “Estimated” next to the appropriate line(s) of Form 8615. When the correct information is available, file Form 1040X, Amended U.S. Individual Income Tax Return.

Instead of using estimates, the child can get an automatic 6-month extension of time to file. For details, see Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.

If after the child's return is filed, the parent's taxable income changes or the net investment income of any of the parent's other children changes, the child's tax must be refigured using the adjusted amounts. If the child's tax changes, file Form 1040X to correct the child's tax.

A child whose tax is figured on Form 8615 may owe the alternative minimum tax. For details, see Form 6251, Alternative Minimum Tax—Individuals, and its instructions.