Kiddie Tax

For the current year years, the alternative minimum tax exemption for a child subject to the Kiddie Tax is limited to the sum of (1) the child's earned income for the taxable year, plus (2) $7,050.

First $1,000 = no tax
Next $1,000 taxed at child's rate
Amounts over $2,000 taxed at parents marginal rate

Yes. The "Kiddie Tax" is applicable to children under 19 years . The "Kiddie Tax" is a tax on children with gross investment income of $2,000 or more. The calculation of the child's tax yields a higher tax calculation using the parents' higher tax rate when applicable.

Yes. Children age 18 years or under with investment income of more than $1,900 must use Form 8615 to figure their income tax. Income over $2,000 is taxed at the parent's higher rates if applicable.
If certain criteria are met, the parents may elect to claim the child's income on their tax return using Form 8814.
Speak to your local CPA about the tax strategy of filing Form 8615 or Form 8814.

The Kiddie Tax refers to the tax parents pay for their dependent children under the age of 19, when the child is taxed at their parents' tax bracket.
The current tax law imposes the "Kiddie Tax" on a dependent child under 19 by the last day of the tax year whose investment income(interest, dividends and capital gains) exceeds $2,000.
The tax is computed using the parents' income tax bracket on the amount of income over the $2,000 threshold.
For the current year the investment income of children under age 14 will get more of a tax break. The first $1,000 of investment income will be tax free and the next $1,000 will be taxed at the child's tax rate. Amounts in excess of $2,000 will be taxed at the parent's rate.