What's the Kiddie Tax?
The Kiddie Tax applies if your child:
has unearned income (usually from investments) exceeding $2,700
isn’t filing jointly
is under age 18 (or under age 24 if a full-time student) as of January 1, 2026
Children who only have earned income from a job or self-employment, don’t make enough money to be required to file, or are filing jointly with their spouses are exempt from the Kiddie Tax.
Follow these steps to report your child's income on your return in TurboTax:
Navigate to the child income screen:
TurboTax Online/Mobile: Go to child income under Wages & Income, then select Less Common Income, and then select Child's Income (Under Age 24).
TurboTax Desktop: Select Search Topics and search for child income.
Answer the questions about your child's income.
What does unemployment compensation mean for the Kiddie Tax?
Unemployment compensation is considered unearned income. A child who receives unemployment compensation may be subject to the Kiddie Tax, and as a result, may pay substantially higher tax than an adult receiving the same compensation.
How is Kiddie Tax calculated?
The Kiddie Tax only applies to unearned income in excess of $2,700.
$0 - $1,350 isn't taxed.
$1,351 - $2,700 is taxed at the child’s tax rate.
Over $2,700 is taxed at the parents’ marginal tax rate.
