IRS Announces 2018 Changes For The Kiddie Tax
IRS Announces 2018 Changes for the Kiddie Tax
With the new Tax Cuts and Jobs Act, the IRS announced changes in the way your children’s unearned income will be taxed in 2018.
The new rules in the “kiddie tax” will determine how federal income tax on unearned income for dependent children under the age of 19 or a full time student under the age of 24 will be calculated.
The tax act now calls for all of a child’s unearned income to be taxed using the estate and trust tax table. The 2018 updates are as follows.
* The first $1,050 is tax-exempt. (The same as last year)
* The second $1,050 will be taxed at the child’s rate (usually 19%).
* Any excess over the amount of $2,100 will be taxed at the parents’ tax rate.