unearned income, dependent

[Unregistered]

My client's husband has severe cancer. They have 3 children. The three children receive income from the ill father teacher's pension fund under a disability code.

Is this Unearned income under IRS code thus necessitating the kids to each file a tax return?

The amount is over the $800. unearned income.

Thanks!!

[Bill Tubbs]

Children's SSN?

I am presuming a 1099 came in the children's SSN... yes, each child would need to file a tax return. Also be aware of the Kiddie Tax rules.

Bill

[Unregistered]

Need to know the ages of the children to give a good answer.

[Bill Tubbs]

Dear Unregistered...

Need to know the ages of the children to give a good answer.

That's why I cautioned to "be aware" of the rules instead of saying "the Kiddie Tax rules applied" -- cuz it does depend on the ages.

Also note that the age for Kiddie Tax goes from 14 to 18 for 2006.

Bill

[Unregistered]

This is an 04 return. At that date, the children were 10, 7, and 2.

Thanks so much for your assitance!!