Unemployment comp and kiddie tax

[appelman]

Is unemployment compensation considered investment income for the kiddie tax? The instructions for Form 8615 say that everything that isn't earned income is investment income, and most software seems to agree. It seems incredible!

[JG EA]

Is unemployment compensation considered investment income for the kiddie tax? The instructions for Form 8615 say that everything that isn't earned income is investment income, and most software seems to agree. It seems incredible!

Well, I wouldn't have ever called it investment income, but the IRS calls it unearned. I wouldn't have thought so, but....

http://www.irs.gov/individuals/article/0,,id=176508,00.html

Examples of Income that is Not Earned Income:
• Pay received for work while an inmate in a penal institution
• Interest and dividends
• Retirement Income
• Social security
• Unemployment benefits,
• Alimony
• Child support.