The bank interest income for a child does not require to report for tax, does anyone know what is maximum $?

Question

I have a one year old child, I was told to set up an account for her. And the interest in that account does not need to report to IRS for tax income, and I still can claim the child as a dependent. I want to know what is maximum interest income for the child to to that.

Answer 1

The first $850 (for 2007) is tax-free, and the next $850 is taxed at the child's tax rate of 0-10%.  Additional amounts are taxed at the parents' rate.

Answer 2

If the account is in the child's name, and the amount of interest does not exceed the filing amount for  tax purposes it will not have to be reported.  I believe for a dependent child the income level is $850.00