How to use the kiddie tax calculator
- 1 Enter the child's unearned income: interest, dividends and capital gains.
- 2 Enter any earned income from a job.
- 3 Choose the parents' tax bracket.
- 4 Read the tax, the amount taxed at your rate and whether Form 8814 can be used.
Worked example
A child with $5,000 of interest and dividends and no earnings, with parents in the 22% bracket. The first $1,350 is tax-free, the next $1,350 is taxed at 10% ($135), and the $2,300 above $2,700 is taxed at 22% ($506). The total is $641, so the kiddie tax adds $276 over the child's own rates.
Investing for your children
- Keep unearned income under $2,700 where you can.
- Use a 529 plan for college money.
- Open a custodial Roth IRA if your child has a job.
- Choose low-dividend growth funds in custodial accounts.
Save for college with the 529 Plan Calculator, check gift limits with the Gift Tax Calculator, and see your bracket with the Tax Bracket Calculator.
Features
2026 thresholds
$1,350 tax-free, $1,350 at the child's rate, parents' rate above $2,700.
Earned income handled
The child's standard deduction rises with earnings.
Form 8814 check
Shows when parents can report the income on their own return.
When to use it
Custodial accounts
Plan UTMA or UGMA investments around the $2,700 threshold. Model growth with the Investment Calculator.
Gifts to children
Large gifts of shares can trigger the tax. Check gift limits with the Gift Tax Calculator.
College saving
A 529 plan avoids the kiddie tax. See the 529 Plan Calculator.
Trump Accounts
Compare with the Trump Account Calculator.
Related Tax tasks
Frequently asked questions
What is the kiddie tax?
A rule that taxes a child's unearned income above a threshold at the parents' tax rate, so families cannot save tax by putting investments in a child's name.
What is the kiddie tax threshold for 2026?
$2,700 of unearned income, unchanged from 2025. The first $1,350 is covered by the child's standard deduction, the next $1,350 is taxed at the child's rate, and the rest at the parents' rate.
Who does the kiddie tax apply to?
Children under 18, 18-year-olds whose earned income is not more than half their support, and full-time students aged 19 to 23 under the same support test, who have unearned income over $2,700 and at least one living parent.
Does the kiddie tax apply to wages?
No. Earned income from a job or self-employment is taxed at the child's own rate, however large.
How is the kiddie tax filed?
On Form 8615 attached to the child's own tax return, using the parents' tax rate.
What is Form 8814?
An election to report the child's income on the parents' return instead. It is allowed only if the child's income is only interest and dividends (including capital gain distributions) and is more than $1,350 but less than $13,500.
How are qualified dividends and capital gains treated?
They keep their lower 0%, 15% or 20% rates, applied using the parents' brackets for the part above $2,700. This calculator uses ordinary rates, which can overstate the tax on those types of income.
How can I avoid the kiddie tax?
Use a 529 plan or Roth IRA for the child (with earned income), choose growth investments that pay little income, hold investments until the child is older, or keep unearned income under $2,700.
What is the child's standard deduction?
For 2026, the greater of $1,350 or earned income plus $450, but no more than the regular $16,100 standard deduction.
Is there a state kiddie tax?
Some states follow the federal rule; others tax the child's income at the child's rate. Check your state's rules.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Built and reviewed by Hamza Farooq, founder and lead developer
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