Kiddie Tax

Kiddie Tax means:
the tax liability for children under age 14 on net unearned income (e.g., interest and dividend income) over $1,200 at their custodial parents' highest marginal tax rate.

For 2010, this special tax imposes the parents' tax rate on investment income in excess of $1,900 earned by children under age 18 or full-time students under the age of 24. The first $950 of the child's 2010 income is tax free, the next $950 is taxed at his or her (presumably) low rate. After that, the parents' rate applies.

U.S. and other Developed Countries International Tax Meaning

Term used to describe tax levied in the US on the unearned income of a child under 14. The income is taxed at the parent's highest rate of tax.

See Dividend in the American Legal Encyclopedia and Dividend in the World Legal Encyclopedia.

See Tax Rate and Tax Rate.

Description and Definition of Kiddie Tax

A popular name for the tax assessed on children under age 14 who have investment income of more than $1,400. The tax is based on the parents' marginal tax rate and computed on Form 8615.

Resources

See Also

Further Reading

• Kiddie Tax in the West's Tax Law Dictionary
• Kiddie Tax in “A Dictionary of Taxation”