2017 Kiddie Tax Threshold
For 2017, the Kiddie Tax Threshold figures are $1,050 (Unearned income reduction amount) and $2,100 (Unearned income filing trigger).
Effective 2017-01-01Source: Rev. Proc. 2016-55 (IRS)Verified 2026-09-03
Unearned income filing triggerSource: 2017 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)Verified 2026-09-03
Compared with 2016
Every figure on this page is unchanged from 2016.
| Item | 2016 | 2017 | Change |
|---|---|---|---|
| Unearned income reduction amount | $1,050 | $1,050 | +$0 (+0.0%) |
| Unearned income filing trigger | $2,100 | $2,100 | +$0 (+0.0%) |
Who it applies to
Children with unearned income subject to the Kiddie Tax under IRC § 1(g) for taxable years beginning in 2017
What changed this year, and why
For 2017, the IRS set the unearned income threshold used in the Kiddie Tax at $1,050. This amount, under Code § 1(g)(4)(A)(ii)(I), reduces the net unearned income reported on a child's return that is subject to the Kiddie Tax. The same $1,050 figure is used under § 1(g)(7) to determine whether a parent may elect to include a child's gross income on the parent's return.
Common questions
- What is the Kiddie Tax unearned income threshold for 2017?
- For 2017, the Kiddie Tax unearned income threshold is $1,050. This amount is used to reduce the net unearned income on a child's return that is taxed under the Kiddie Tax rules.
- What is the Kiddie Tax?
- The Kiddie Tax is a rule under IRC § 1(g) that taxes a child's unearned income at the parent's tax rate, rather than the child's own rate, above certain thresholds.
The five conditions, and the three age tests
Form 8615 is neither optional nor elective: five conditions decide whether the child's return has to carry it, and every one of them must be true at the same time. Two are settled quickly - unearned income above $2,100 for 2017, and a child who was required to file a return anyway. A child below that amount, or with no filing obligation at all, is outside the rule however the rest reads. The third condition does most of the work, because it is three tests sharing one slot. A child under 18 at the end of 2017 is caught with nothing further asked. A child who was 18, and a full-time student who was at least 19 and under 24, is caught only where their own earnings did not cover over half of what supporting them cost - so the student paying their own way is out of it, and the one living on family money is in. The last two conditions look past the child: a parent has to have been alive when 2017 ended, since the tax this form figures is measured by reference to a parent, and the child must not be filing a joint return for the year.
Form 8615 must be filed for any child who meets all of the following conditions. 1. The child had more than $2,100 of unearned income. 2. The child is required to file a tax return. 3. The child either: a. Was under age 18 at the end of 2017, b. Was age 18 at the end of 2017 and didn’t have earned income that was more than half of the child's support, or c. Was a full-time student at least age 19 and under age 24 at the end of 2017 and didn’t have earned income that was more than half of the child's support. (Earned income is defined later. Support is defined below.) 4. At least one of the child's parents was alive at the end of 2017. 5. The child doesn’t file a joint return for 2017.
2017 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)
What counts as unearned income
For purposes of Form 8615, unearned income is defined broadly as all taxable income other than earned income. The list of items treated as unearned income includes taxable interest, ordinary dividends, capital gains (including capital gain distributions), rents, and royalties. Wages, tips, and other payments received for personal services are excluded because they are earned income, not unearned income. The $1,050 verified figure represents the base amount used in computing the child's net unearned income on Form 8615.
For Form 8615, “unearned income” includes all taxable income other than earned income as defined later. Unearned income includes taxable interest, ordinary dividends, capital gains (including capital gain distributions), rents, royalties, etc. It also includes taxable social security benefits, pension and annuity income, taxable scholarship and fellowship grants not reported on Form W-2, unemployment compensation, alimony, and income (other than earned income) received as the beneficiary of a trust.
2017 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)
The support test that decides whether an older child is caught
For a child who was age 18, or a full-time student at least age 19 and under age 24, at the end of 2017, one of the age tests in the "Who Must File" section requires that the child did not have earned income that was more than half of the child's support. Support includes all amounts spent to provide the child with food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. When figuring the child's support, count support provided by the parent, the child, and others. A scholarship received by the child is not counted as support if the child is a full-time student. If the child's earned income was more than half of the child's support, the child does not meet the age test for that category and Form 8615 is not required on that basis.
Support. Your child's support includes all amounts spent to provide the child with food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. To figure your child's support, count support provided by you, your child, and others. However, a scholarship received by your child isn’t considered support if your child is a full-time student.
2017 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)
Reporting the child's income on the parent's return instead
For the 2017 tax year, a parent may elect to include a child's interest income, ordinary dividends, and capital gain distributions on the parent's own federal income tax return instead of having the child file a separate return. When this election is made, the child is relieved of the obligation to file an income tax return or to file Form 8615, which is the form normally used to compute the kiddie tax on the child's own return. The election is made by completing Form 8814, titled Parents' Election To Report Child's Interest and Dividends. Parents should be aware that using this election can result in a higher federal income tax on the child's income, including qualified dividends and capital gain distributions, than if the child filed separately. The election is optional; families may compare outcomes and choose the method that produces the lower overall tax. Further guidance on this special election, including eligibility requirements and instructions for filling out the form, is available in the instructions for Form 8814 and in IRS Publication 929, Tax Rules for Children and Dependents.
arent may be able to elect to report the child's interest, ordinary dividends, and capital gain distributions on the parent's return. If the parent makes this election, the child won’t have to file a return or Form 8615. However, the federal income tax on the child's income, including qualified dividends and capital gain distributions, may be higher if this election is made. For more details, see Form 8814, Parents' Election To Report Child's Interest and Dividends.
2017 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)
Why the child's own bracket is not the end of it
For children under age 18 and certain older children described in the Who Must File section, unearned income over $2,100 is taxed at the parent's rate if the parent's rate is higher than the child's. This is the so-called "kiddie tax." If the child's unearned income is more than $2,100, Form 8615 is used to figure the child's tax. The purpose of the form is to make sure that a child's investment income is not taxed at the child's typically lower rate when it would otherwise be taxed at the parent's higher rate. The threshold for unearned income in 2017 is $1,050 for the base amount used in computing net unearned income, and the $2,100 figure is the level above which the parent's rate applies.
Purpose of Form For children under age 18 and certain older children described below in Who Must File, unearned income over $2,100 is taxed at the parent's rate if the parent's rate is higher than the child's. If the child's unearned income is more than $2,100, use Form 8615 to figure the child's tax.
2017 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)
A January 1 birthday counts the child a year older
For federal kiddie tax purposes in 2017, a child's age is measured as of the last day of the year - December 31. The IRS treats anyone born on January 1 as having reached their next birthday by year's end, so a child born on January 1, 1999 is treated as 19 at the end of 2017, not 18. This matters because one of the three conditions for being subject to the kiddie tax is that the child be under a certain age (under 19, or under 24 if a full-time student). A child born on January 1 ages into the next bracket for that year: for instance, a child born on January 1, 2000 is considered 18 at the end of 2017 and is no longer under 18, so the age-based condition for kiddie tax would not be met through that route. Taxpayers should consult the chart in the IRS guidance to determine which January 1 birthdays push a child into the older age category for the tax year.
Certain January 1 birthdays. Use the following chart to determine whether certain children with January 1 birthdays meet condition 3 under Who Must File. IF a child was born on... THEN, at the end of 2017, the child is considered to be... January 1, 2000 18* January 1, 1999 19** January 1, 1994 24*** *This child isn’t under age 18. The child meets condition 3 only if the child didn’t have earned income that was more than half
2017 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)
Passing the kiddie tax does not clear the child of AMT or the investment income tax
Even after the kiddie tax has placed a child's ordinary income tax at the parent's rate, two other federal taxes may still apply to the child's return. First, a child whose tax is figured on Form 8615 may owe the alternative minimum tax, computed on Form 6251. Second, the same child may be subject to the Net Investment Income Tax (NIIT), which is figured on Form 8960 and applies to the lesser of net investment income or the amount by which the child's modified adjusted gross income exceeds the NIIT threshold. Neither of these levies is absorbed or superseded by the kiddie tax calculation. The kiddie tax only determines how the child's regular income tax is measured; AMT and NIIT are layered on top and must be checked separately. Parents preparing the child's return should therefore review both Form 6251 and Form 8960, in addition to the Form 8615 computation.
A child whose tax is figured on Form 8615 may owe the alternative minimum tax. For details, see Form 6251, Alternative Minimum Tax—Individuals, and its instructions.
2017 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)
If a parent's income later changes, the child's tax has to be refigured
When a parent's income changes after a child's return has been filed using estimated figures, the child's tax must be refigured using the adjusted amounts. The same refiguring requirement applies if there are changes to the net unearned income of other children for whom the parent is required to file a Form 8615. If the recomputation produces a different tax liability for the child, the parent must file Form 1040X, Amended U.S. Individual Income Tax Return, to correct the child's return. The rule ensures that the kiddie tax, which ties the child's tax to the parents' tax bracket, stays aligned with the parents' actual income rather than an estimate. Because the parent's bracket determines the rate applied to the child's unearned income, any shift in that bracket after filing requires the child's tax to be recalculated and, if necessary, amended through Form 1040X.
If the parent’s income changes after the child’s return is filed, the tax must be refigured using the adjusted amounts. The child’s tax must also be refigured if there are changes to the net unearned income of other children for whom the parent is required to file a Form 8615. If the child's tax changes, file Form 1040X to correct the child's tax.
2017 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2016-55 (IRS)
- Unearned income reduction amount
For taxable years beginning in 2017, the amount in § 1(g)(4)(A)(ii)(I), which is used to reduce the net unearned income reported on the child's return that is subject to the "kiddie tax," is $1,050.
2017 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)
- Unearned income filing trigger
1. The child had more than $2,100 of unearned income.