Unearned income (dividends, rents, interest, etc) of a child under age 14 will be taxed to the child at the parent's highest income tax rate.
The tax on a child's unearned income based on the child's parents' marginal income tax rate. In 2002, a child under age 14 at the end of the tax year who has unearned income in excess of $1,500 is taxed on this excess at the top marginal income tax rate of the parent(s).
An IRS regulation that requires unearned income (i.e., interest, dividends, capital gains, etc.) received by a child under the age of 14 to be taxed at the parent's (usually higher) tax rate.
The relatively low rate of tax on the first $1,450 of income, such as interest from investments, of a dependent child under the age of 14.
The provision in federal income tax law that states that investment income over a certain dollar amount belonging to a child under age 18 will be taxed at the parent's tax rate. For convenience, the Kiddie Tax income can be reported on the parents' return. For tax year 2006, the Kiddie Tax began at $1,700 of investment income.
Tax owed for the investment income of children if the amount is more than $1,400.
A tax on children under 14 who earn income over $1,200. The extra income is taxed at the guardian's rate.