If a child that you can claim as a dependent in 2006 had: (a) unearned income (e.g. interest, dividends, investments) over $850, (b) earned income over $5,150 or (c) gross income that was the greater of $850 or earned income up to $4,850 plus $300; he or she must report this income on a tax return of some sort.

• Reporting on the child's own return — Beginning in 2006, the "kiddie tax" rules are much less favorable to minor children with investment income and their families.
• Reporting a child's income on your return New rules create some tricky choices for parents reporting a child's income.