The Tax Cuts and Jobs Act (TCJA) made substantial changes to the Kiddie Tax in 2018 through 2025. Instead of using the parent’s highest marginal rate, the Kiddie Tax is now determined by the tax brackets and rates for trusts and estates. Here’s what those work out to:
- The first $2,600 (after the initial $2,200) is taxed at 10%
- The next $6,700 is taxed at 24%
- The next $3,450 is taxed at 35%
- Anything beyond that is taxed at 37%
So, if you elect to you the pre-TCJA rules, your parent(s) income is needed. If you use the current rules, her income is not needed and your tax will be based on the data above. And whether or not it is a beneficial choice to make depends on her tax rates.
What is the 2019 Kiddie Tax?
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