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Richard T. Miller, CPA, PFS
Registered Representative
Van Buren Financial Group, LLC
615 West 18th Street, Wilmington, DE 19802
Phone: 302-655-9505
July/August 2024
Kiddie Tax 2024
If your child has an investment or other unearned income above a certain threshold, that income may be subject to the kiddie tax.
For 2024, the first $1,300 of a child’s unearned income is tax-free. The next $1,300 of unearned income is taxed at your child’s tax rate. Any additional earnings above the $2,600 threshold are taxed at the child’s or parents’ tax rate, whichever is greater.
What Qualifies as Unearned Income?
A child’s unearned income may include:
- Taxable interest
- Capital gains
- Taxable scholarships
- Income produced by gifts from grandparents or others
- Income from custodial accounts
Exceptions
The kiddie tax does not apply to children who spend their own earned income for more than half the cost of their support. Children who are married and file a joint return are also not subject to the tax. Your tax professional can provide more information.
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