The Pre-TCJA rates are more favorable. It taxed the unearned income based on the parent's tax rates instead of the trust and estates'.
Form 1040 line 9b is an error and it's already been reported. For qualified dividends on the parent's return, it should be line 3a if you have any.
Here are the details:
Changes to Tax Rates on Children's Unearned Income
Historically, children's unearned income was taxed on the parent(s)' marginal tax rate.
In 2018, the Tax Cuts and Jobs Act (TCJA) provided for a change in the tax rate on children's unearned income from 2018 until 2025, so that the rate is based on the tax rate for estates and trusts.
Congress later became concerned that the TCJA unfairly increased the rate rates on children and young adults, including those who are survivors of deceased members of the military, emergency medical workers, and first responders.
Recent legislation effectively repeals that part of the TCJA and returns the tax rate on children's unearned income to the marginal tax rate of the parent(s), which is more favorable. This change is effective for 2020 and beyond, but you can choose to apply that rate to 2019 returns by making this election.
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