This chapter discusses two special tax rules that apply to certain investment income of a child under age 14.

1. A child's parent may be able to choose to include the child's interest and dividend income on the parent's return rather than file a return for the child. See Parent's Election To Report Child's Interest and Dividends, later.
2. If a child's interest, dividends, and other investment income total more than $1,400, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. SeeTax for Children Under Age 14 Who Have Investment Income of More Than $1,400, later.

In both cases, the term "child" includes a legally adopted child and a stepchild. These rules apply whether or not the child is a dependent.

These rules do not apply if:

1. The child is not required to file a tax return, or
2. Neither of the child's parents were living at the end of the tax year.

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