A blog post

Look out for “Kiddie Tax”

Posted on the 01 December, 2009 at 9:24 pm Written by in Taxes

Many family-owned businesses shift income between family members.

The kiddie tax requires the excess unearned income of children to be taxed at their parents’ marginal rate. Unearned income would include interest and dividends, for example.

It used to apply only to children under 18 in 2007. Beginning in 2008 it now applies to all children under 19 and to full-time students under age 24, unless the student’s earned income is one-half of his or her support.