Kiddie Tax Calculator
Calculate a dependent child's federal tax under Form 8615 — net unearned income above the $2,700 threshold (2025) is taxed at the parent's marginal rate. Includes Form 8814 parent- election comparison for children whose income is only interest and dividends.
Threshold: $2,700 (2× dependent standard deduction floor)
W-2 wages, self-employment
Interest, dividends, capital gains, UTMA/UGMA income
AGI minus deductions (Form 1040 line 15)
- Gross income (earned + unearned)
- $5,000
- Dependent standard deduction
- $1,350
- Taxable income
- $3,650
- Kiddie tax threshold
- $2,700
- Net unearned income (parent rate)
- $2,300
- Remainder (child rate)
- $1,350
- Parent marginal rate
- 22%
- Tax at parent rate
- $506
- Tax at child rate
- $135
- Total federal tax
- $641
- Kiddie tax penalty (vs all-child-rate)
- $276
Child under 18 at year-end with unearned income above the threshold.
Because the child has no earned income and unearned income is below $13,500, you may elect to report the child's interest and dividends on your own return (Form 8814) instead of filing a separate return for the child.
- Child tax on second tier (10%)
- $135
- Amount added to parent return
- $2,300
- Parent additional tax
- $506
- Form 8814 total cost
- $641
- Form 8615 total tax
- $641
Frequently asked questions
What is the kiddie tax?
The kiddie tax (Form 8615) taxes a child's unearned income above an annual threshold ($2,700 for 2025) at the parent's marginal tax rate instead of the child's lower rate. It applies to children under 18 at year-end, age 18 with earned income no more than half of support, or full-time students age 19–23 with earned income no more than half of support.
How is the kiddie tax calculated?
First, compute the child's taxable income (gross income minus the dependent standard deduction — greater of $1,350 or earned income + $450, capped at the single standard deduction). Then net unearned income (unearned − $2,700 for 2025, capped at taxable income) is taxed at the parent's marginal rate. The remaining taxable income is taxed at the child's own rates.
When does kiddie tax apply?
If the child has unearned income above the threshold, at least one living parent, is not filing jointly, and falls into one of the qualifying age groups: under 18 at year-end; age 18 with earned income ≤ half of support; or a full-time student age 19–23 with earned income ≤ half of support.
Can I report my child's investment income on my tax return?
Yes, via Form 8814 — but only if the child's income is solely interest and dividends (including capital gain distributions) and under $13,500 for 2025. The first $1,350 is tax-free, the next $1,350 is taxed at 10%, and amounts above $2,700 add to your AGI. The election can reduce IRA deductibility, education credits, and other AGI-based benefits.
What counts as unearned income?
Taxable interest, ordinary and qualified dividends, capital gains, rents, royalties, trust distributions, taxable Social Security, pensions, annuities, and income from UTMA/UGMA custodial accounts. Wages and self-employment are earned income and always taxed at the child's rate.
What is the kiddie tax threshold for 2024, 2025, and 2026?
$2,600 for 2024, $2,700 for 2025, and approximately $2,800 for 2026 (projected, pending IRS Rev. Proc.). Below the threshold, unearned income is taxed at the child's rate.
Sources
Related insights
Use these guides for rule explanations, planning context, and follow-up questions beyond the calculator result.