Children under 24 with investment income greater than $2,100 may be subject to tax.. This does not apply to children who are married and file a joint tax return with their spouse. For tax years 2018-2025, the tax is computed using trust and estate tax rates - it is no longer affected by the parents tax rates. The trust and estate tax rates are completely different from individual tax rates.
The kiddie tax rules also apply where a child:
turns 18 or is a full-time student under age 24 before the close of the tax year
earned income for the year doesn't exceed one-half of his support (age 18 or a full-time student under age 24 only)
has more than $2,100 of unearned income
has at least one living parent at the end of the tax year
doesn't file a joint return
For tax years 2008 and later, the kiddie tax applies to a child under 18 even if the child's earned income exceeds half of his support.
Parents who elect to report a child's unearned income on their return may be subject to the Net Investment Income Tax because the child's income must be included in the parent's modified AGI.