@mitchden1 wrote:
For a child, on unearned income (i.e. interest) between $1,250. and $2.500., I think the tax rate for the child is 10%. Anything more than that is taxed at the parents marginal tax rate. Is that correct?
Does that change when the child is no longer my dependent?
You can review the age and other requirements for the "kiddie tax" here. In some cases, the child's interest income can be taxed at a higher rate up through age 23, even if you don't declare them as dependents.
https://www.irs.gov/taxtopics/tc553
Also, the rules for when you can include a child's income on your return are different than the rules for when a child pays the kiddie tax on their return (although they overlap in part, they also have differences).
For now, if the child's only income is bank interest, you have the option of reporting it on your return or filing a separate return for each child. If the child ever has income that is not interest and dividends (such as capital gains, or income from working), then all the child's income must only be reported on a return in the child's own name.
