For his 2011 return, my 14 year old paid $1500 in Mass state tax because of interest, dividends and cap gain income from an account given to him by his grandfather. Of course, the $1500 state tax was paid in the year 2012.

For his 2012 return, his income (all unearned) was only $1800. Can he file his own return and instead of using the reduced standard deduction of $950 (because I claim him on my return) use an itemized deduction of $1500 because state taxes are deductible in the year they are paid? Or does he have to use the standard deduction of $950? And if it's OK to use the $1500 deduction, do we still have to file a return given that the tax due is zero?

Thanks! 

In response to Forte77's comment:

For his 2011 return, my 14 year old paid $1500 in Mass state tax because of interest, dividends and cap gain income from an account given to him by his grandfather. Of course, the $1500 state tax was paid in the year 2012.

For his 2012 return, his income (all unearned) was only $1800. Can he file his own return and instead of using the reduced standard deduction of $950 (because I claim him on my return) use an itemized deduction of $1500 because state taxes are deductible in the year they are paid? Or does he have to use the standard deduction of $950? And if it's OK to use the $1500 deduction, do we still have to file a return given that the tax due is zero?

Thanks! 

Dear Forte77:


Yes, he should file a return, because the gross income (the amount before deductions and exemptions) exceeds the $ 950 that is allowed to him as a dependent with no tax.  Even filing as a dependent subject to the "Kiddie Tax", he may choose to itemize his deductions, rather than take the standard deduction.

Hope this helps in preparing your returns!

Mark H. Misselbeck, C.P.A., M.S.T., Tax Principal

Katz, Nannis + Solomon, P.C.

In response to MASocietyofCPAs' comment: