Standard deduction limited and does not apply to unemployment income?

[Tennisfam]

My son, a dependent, received unemployment of $16K during COVID and earned income of $8K the rest of the year. Total income $24K. He is receiving the $10,200 against his unemployment and the standard deduction is being limited to 8K in Turbo tax., leaving income of approx 6K that is being taxed at my tax rate of 28% "Kiddie tax." This does not seem right, he is getting slammed with a bill for $1229 on the fed side and $1074 on the NYS side (I realize that there is no unemployment exemption in NYS).  Is this right? This is horrible. 

Thank you.

Jeanne

[Bsch4477 · Accepted solution]

Sounds correct. His standard deduction is limited to his earned income and the unemployment income is subject to the Kiddie tax. 

[Mike9241]

Unemployment benefits aren’t considered earned income.