1. It depends. The standard deduction (2025) for a dependent is earned income plus $450. If he is not your dependent, he would get the full standard deduction. 1b. As for the kiddie tax, a non-qualified withdrawal of the earnings portion can trigger the kiddie tax.
2. Yes, kiddie tax is eliminated at age 24 and would be taxed at his tax bracket level rather than the parents.
3. The scholarship exception is the perfect start. NO IRA, no sibling, no student loan debt, simply leaves timing. The money must be out by age 30 so the timing and moving of the money is at your discretion.
Additional information:
Age 23 dependent: Child’s Net Earned Income + Child’s Net Unearned Income – Child’s Standard Deduction = Child’s Taxable Income
For 2025, earnings above $2,700 are taxed at the child’s parents’ marginal tax rate.
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