Quiz
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
K
Kiddie Tax

The informal name of a provision in the tax code that applies to a child's unearned income (such as interest, capital gains, and dividends). Under the kiddie tax, in 2019 the first $1,100 of a dependent child's unearned income is tax-free (offset by the child's standard deduction), the second $1,100 of unearned income is taxed at the child's tax rate, and any amount over $2,200 is taxed at the rates for trusts and estates.

In 2018, the Tax Cuts & Jobs Act changed the tax rate on income over the limit from the parents' rate to the rates for trusts and estates. For details about that change, see a commentary from the CPA firm Concannon Miller.

The kiddie tax affects strategies for gifting company stock (see a related FAQ).

Return to list Register Now

Try the new myStockOptions.com Glossary App! Now available for Android and iOS.

Get it on Google Play
The content is provided as an educational resource.
myStockOptions.com shall not be liable for any errors or delays in the content, or any actions taken in reliance thereon.
Copyright © 2000-2019 myStockPlan.com, Inc. U.S. Patent 7,353,200.
Contact editors@mystockoptions.com for licensing information