Kiddie Tax Calculator

The kiddie tax (IRC §1(g), reported on Form 8615) taxes a child's unearned income above an annual threshold — $2,700 for 2025 and $2,700 for 2026 — at the parent's marginal tax rate instead of the child's lower rate. It exists to stop families from shifting investment income to children just to use the child's lower brackets. It applies to children under 18 at year-end, children who are exactly 18 whose earned income does not exceed half of their own support, and full-time students age 19–23 whose earned income does not exceed half of their support.

$2,600 for 2024 (Rev. Proc. 2023-34), $2,700 for 2025 (Rev. Proc. 2024-40), and $2,700 for 2026 (Rev. Proc. 2025-32 — unchanged from 2025). The threshold is always twice the dependent standard deduction floor: the first $1,350 of unearned income is tax-free, the next $1,350 is taxed at the child's own rate, and only the amount above $2,700 is taxed at the parent's marginal rate.

Three steps. First, compute the child's taxable income: gross income minus the dependent standard deduction, which is the greater of $1,350 or earned income plus $450, capped at the regular single standard deduction of $15,750 (2025). Second, compute net unearned income: unearned income minus the $2,700 threshold, capped at taxable income. That amount is taxed at the parent's marginal rate on Form 8615. Third, the remaining taxable income is taxed at the child's own single-filer rates.

The kiddie tax can apply through age 23. Under 18 at year-end: always in scope. Exactly 18 at year-end: in scope only if the child's earned income does not exceed half of their own support. Age 19–23 at year-end: in scope only if the child is a full-time student AND earned income does not exceed half of their support. From age 24 onward the kiddie tax never applies, regardless of student status or how large the unearned income is — the child simply files their own return at their own rates.

Usually yes. A 22-year-old who is a full-time student for at least five months of the year and whose earned income (wages, self-employment) does not exceed half of their own support is subject to the kiddie tax on unearned income above $2,700 (2025). The escape hatches: stop being a full-time student, reach age 24, or earn enough from work to provide more than half of your own support — any one of these switches all income back to the child's own rates.

Form 8615 goes on the child's own return and taxes net unearned income at the parent's rate; it is mandatory whenever the kiddie tax applies and no election is made. Form 8814 is an optional parent election: if the child's only income is interest, dividends, and capital gain distributions totaling under $13,500 (2025), the parents may report it on their own return instead. Under the election the first $1,350 is tax-free, the next $1,350 is taxed at 10%, and everything above $2,700 is added to the parents' taxable income. Form 8814 saves paperwork but raises the parents' AGI, which can shrink IRA deductibility, education credits, and other AGI-based benefits. This calculator computes both routes side by side whenever the election is available.

Taxable interest, ordinary and qualified dividends, capital gains (including capital gain distributions from mutual funds), rents, royalties, trust distributions, the taxable part of Social Security or pension benefits, and all investment income inside UTMA/UGMA custodial accounts. Earned income — wages from a job or net self-employment earnings — is never subject to the kiddie tax and is always taxed at the child's own rate.

Yes — long-term capital gains count toward unearned income and toward the $2,700 threshold. But they keep their preferential character: on the real Form 8615, net capital gain inside net unearned income is taxed through the Schedule D Tax Worksheet at the parent's long-term capital gains rate (0% / 15% / 20% for 2025 married filing jointly, depending on the parents' income) rather than the parent's ordinary bracket. This calculator currently taxes all unearned income at ordinary rates, so for gain-heavy inputs it overstates the bill — treat its result as a conservative upper bound and see the worked example below.

A dependent child must file for 2025 if unearned income exceeds $1,350, earned income exceeds $15,750, or gross income exceeds the larger of $1,350 or earned income plus $450 (up to $15,750). Below those levels no return is required — and unearned income at or below the $2,700 kiddie-tax threshold never triggers parent-rate tax even when a return is required. Filing thresholds come from IRS Publication 501.

Keep the child's annual investment income at or under the $2,700 threshold (2025) by choosing growth assets over income-producing ones, or use wrappers whose earnings are not taxed to the child each year: 529 plans (tax-free for education), Series EE/I savings bonds (interest deferrable until redemption), and Roth IRAs funded from the child's own earned income. Realizing gains gradually across years — instead of one large sale — also keeps each year under the threshold. Earned income from a summer job is never kiddie-taxed.