What is the Kiddie Tax thresholds in 2023?

[LP1968]

I understand that the the Kiddie Tax 2023 thresholds are increased to $1,250 and $2,500. 

However, the IRS still refers to $1,100 and $2,200 at https://www.irs.gov/taxtopics/tc553 

and Turbotax still refers to $1,250 and $2,300 at https://ttlc.intuit.com/turbotax-support/en-us/help-article/taxation/report-child-investment-income/...

So, I am confused. Please advise. Thanks. 

[NCperson]

yes, it's $1250 and $2500

page 8

https://www.irs.gov/pub/irs-drop/rp-22-38.pdf

[LP1968]

Great. Thanks! 

One more related clarification: if my kid's non-earned (e.g. dividend) yearly income will be between $1250 and $2500, do I still need to report it in my return? (since it's more than $1250, although, if i understand this correctly, it will be taxed at the kids 0% tax rate since less than $2500)...

... or I need to report  my kid's non-earned (e.g. dividend) yearly income only if > $2500 (and obviously < $11,000 at which level my kid needs to file its own tax return).... 

Thanks again!

[LP1968]

I just realized that i rushed in asking my last question/clarification. Obviously, I need to report any kiddie income above $1,250. The portion of the income less than $2500 will be taxed at 10% (the kids rate).  The remaing income above $2500 will be taxed my marginal tax rate. In case, the kiddie income exceeds $11000, the kid has to file its own tax return. Correct?  

[NCperson]

@LP1968 let's make sure we are on the same wave length....these are all questions that relate to the tax return you will submit by April 15, 2024 (which is the 2023 tax year)

While everyone is going to file taxes by  April, 2023, that is the '2022 tax year'. 

putting the kiddie tax aside, the child ALWAYS is responsible for reporting his income.  It never goes on your tax return.  Assuming his income is from W-2s, if his income is below the standard deduction ($12,950 in 2022), then there is no requirement to file, however, it's the only way to get back any tax withholdings. 

TT will calculate the kiddie tax if the child is required to file

Given that information, please ask your questions again.  

[LP1968]

Thanks for clarifying! very helpful indeed! 

let me first mention that my question is specifically about only unearned kid's income, i.e. dividents, interest, or capital gains, in the kids Custodial account (that i manage until the kid turns 18 or 24...). 

So, my quesiton wants to confirm that: 

I need to report the kids unearned income only if above $1,250 in 2023 (or $1150 in 2022).

The portion of the income less than $2500 in 2023 (or $2300 in 2022) will be taxed at 10% (the kids rate). 

The remaing income above $2500 in 2023 will be taxed my marginal tax rate.

In case, the kiddie income exceeds $11000, the kid has to file its own tax return even if it only has unearned income. 

If any earned income (W2 etc), the kid will need to file its own tax return if above the standard deduction ($12,950 in 2022). 

Correct?  

[Critter]

Correct ... but many parents file the kids returns separately especially if their income will mess with the parent's return negatively.  Prepare them both ways before making a decision. 

[NCperson]

@LP1968 - let me try and make it simpler: 

the child has to file an income tax return if his total income exceeds the standard deduction.

For your dependent children, the 2022 standard deduction is  greaterof $1,150 or his earned income plus $400, but not to exceed the normal standard deduction ($12,950)

For 2023, the standard deduction is greater of  $1,250 or his earned income plus $400. but not to exceed the normal standard deduction of $13,850.

<<In case, the kiddie income exceeds $11000, the kid has to file its own tax return even if it only has unearned income. >>  

not necessarily. If earned income is $11500 and unearned income is $399, there is no filing requirement 

take a look at this article - well written - it has 2021 numbers, but just insert 2022 / 2023 numbers in its place. 

https://www.savingforcollege.com/article/what-is-the-kiddie-tax#:~:text=For%202022%2C%20the%20first%....