2017 Kiddie Tax Threshold
The 2017 Kiddie Tax Threshold is $1,050.
Effective 2017-01-01Source: Rev. Proc. 2016-55 (IRS)Verified 2026-08-29
Compared with 2016
Every figure on this page is unchanged from 2016.
| Item | 2016 | 2017 | Change |
|---|---|---|---|
| Unearned income threshold | $1,050 | $1,050 | +$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 must be filed for any child who meets all five of the following conditions: the child had more than $2,100 of unearned income; the child is required to file a tax return; the child satisfies one of three age tests (was under age 18 at the end of 2017, was age 18 and did not have earned income that was more than half of the child's support, or was a full-time student at least age 19 and under age 24 and did not have earned income that was more than half of the child's support); at least one of the child's parents was alive at the end of 2017; and the child does not file a joint return for 2017. The term "child" includes a legally adopted child and a stepchild, and the rules apply whether or not the child is a dependent. The rules do not apply if neither of the child's parents were living at the end of 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. It also covers taxable social security benefits, pension and annuity income, taxable scholarship and fellowship grants that are not reported on Form W-2, unemployment compensation, alimony, and income (other than earned income) received as the beneficiary of a trust. 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
A parent may be able to elect to report the child's interest, ordinary dividends, and capital gain distributions on the parent's own return instead of filing a separate return for the child. If the parent makes this election, the child does not have to file a return and does not have to file 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. The details of the election are found in Form 8814, Parents' Election To Report Child's Interest and Dividends.
The parent 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)
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 threshold
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.