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<p>I said that for purposes of the “Kiddie Tax” taxable scholarships are considered unearned income. One of the conditions that must be met to trigger the required filing of form 8615 is $2,000 in unearned income (includes taxable scholarships).</p>
<p>I believe that even if form 8615 is required, there is still an option to include the child’s income on the parent’s return (thus subjecting all of the child’s income to tax at the parent’s highest marginal rate).</p>