The “Kiddie Tax” or tax on a child’s investment or unearned income is seeing some changes to the rates under the Tax Cuts and Jobs Act. Under the old law up to $2,100 of unearned income for a child aged 19 or under, or up to age 24 if they are a full-time student. This still holds true under TCJA, however, income amounts over $2,100 that were previously taxed at the parent’s tax rate are now taxed at the identical rate of income in a trust or estate.

The tax rates for 2018 will be as shown below:

Income Amount:

Tax Rate:

$2,100 to $2,550

10%

$2,550 to $9,150

24%

$9,150 to $12,500

35%

$12,500 and Over

37%

 

 

The above information is of a general nature only and should not be relied upon for specific situations. Click here for additional tax services information.

Call Marlies Y Hendricks CPA PLLC at either 716-694-3500 or 910-769-8730 as required to set up an appointment.