Kiddie Tax

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Is kiddie tax optional for the parents and the dependent child? Do we have an option to choose whether to tax the income on the parent's or child's level?

Please provide more information on how to properly complete the tax preparation in Turbo Tax when the software wants to tax the investment income on child's tax return and gives an error and tells you you need to complete additional forms with information about the parent.

Ask the Experts - Changes II - Mar 2025

DawnCAnswer

Employee Tax Expert

The Kiddie Tax applies if your child:

has unearned income (usually from investments) exceeding $2,600
is required to file a return
isn’t filing jointly
is under age 18 (or under age 24 if a full-time student) as of January 1, 2025

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.

See Kiddie Tax - for entering steps.

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DawnC

Answer

Employee Tax Expert

The Kiddie Tax applies if your child:

has unearned income (usually from investments) exceeding $2,600
is required to file a return
isn’t filing jointly
is under age 18 (or under age 24 if a full-time student) as of January 1, 2025

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.

See Kiddie Tax - for entering steps.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"