For 2019, the word "reversed" is misleading.
it was **optionally** reversed for 2019 and even retroactively 2018.
The new rule is forced only starting in 2020.
From https://www.sfchronicle.com/business/networth/article/Congress-reversed-kiddie-tax-change-that-14990... for example:
The provision titled “Tax Relief for Certain Children” completely reverses the kiddie-tax change made in 2018, starting with tax year 2020. However, it also says that subject to the Treasury Department issuing guidance, taxpayers can choose to apply the repeal to the 2018 and 2019 tax years or both.
In 2019 there is a choice so my question for 2019 still is important.
since i posed the question, i pinpointed the location where TurboTax
does something mysterious.
on the form 8615 QDCG Wks line 8, it says enter $39,375 if single etc.
but rather it puts in another number (e.g. 3700 in the qualified case)
which it puts directly into the 0% tax bracket. Nice to have!
There is no clue to how $3700 is calculated, but it is clearly
somehow $1100 + $2600. Why turbotax can't put that on the worksheet is beyond me.
The $2600 smells like a mistake that should be $2650 corresponding to the trust and estate
0% bracket.
The $1100 is a surprise, which says that if you don't have interest income, you get to do even
$1100 more at 0%. That's a nice surprise.
If the 8615 QDCG was only more transparent on line 8, we wouldn't have to try to guess what's going on.
I gather from the lack of response from the community, nobody else seems to know either. (????)
