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Tax Rules for Children with Investments Income Abroad All Americans are required to file US taxes, whether they live in the States or abroad, or whether they’re adults or children. US tax filing rules are slightly different for children though. American children with investments abroad are required to report their investment income (e.g. interest and dividends) if their total unearned income exceeds just $1,050 in a year. If their income is from dividends and interest (including capital gain distributions) and is less than $10,500 however, it can be reported on their parent’s tax return if the parent elects to by filing IRS Form 8814 ( Parents’ Election To Report Child’s Interest and Dividends ) . More information can be found in IRS Publication 929, Tax Rules for Children and Dependents . Note that the same rules and thresholds apply whether an American child’s investments are in the US or abroad, or whether the child lives in the US or abroad. In short, the US tax