2018 Kiddie Tax Threshold
For 2018, the Kiddie Tax Threshold figures are $1,050 (Unearned income reduction amount) and $2,100 (Unearned income filing trigger).
Effective 2018-01-01Source: Rev. Proc. 2017-58 (IRS)Verified 2026-09-03
Unearned income filing triggerSource: 2018 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)Verified 2026-09-03
Compared with 2017
Every figure on this page is unchanged from 2017.
| Item | 2017 | 2018 | 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 subject to the kiddie tax under IRC § 1(g), whose unearned income is taxed as if it were the parent's income.
What changed this year, and why
The unearned income threshold under IRC § 1(g)(4)(A)(ii)(I) used to reduce the net unearned income reported on a child's return subject to the "kiddie tax" is $1,050 for taxable years beginning in 2018.
Common questions
- What is the Kiddie Tax unearned income threshold for 2018?
- The unearned income threshold used in the kiddie tax calculation is $1,050 for 2018. This amount reduces the net unearned income reported on a child's return that is subject to tax at the parent's rate.
The five conditions, and the three age tests
A child must file Form 8615 for 2018 only when all five conditions are satisfied simultaneously. First, the child's unearned income must exceed $2,100. Second, the child must otherwise be required to file a federal income-tax return. Third, the child must satisfy one of three age tests: either be under age 18 at the end of 2018; or be age 18 at year-end and not have earned income that was more than half of the child's own support; or be a full-time student at least age 19 and under age 24 at year-end and likewise not have earned income exceeding half of support. Fourth, at least one parent must have been alive at the close of 2018. Fifth, the child cannot be filing a joint return for the year. The rules extend to legally adopted children and stepchildren and apply whether or not the child is claimed as a dependent. They do not apply, however, when neither parent was living at year-end.
Who Must File Form 8615 must be filed for anyone who meets all of the following conditions. 1. You had more than $2,100 of unearned income. 2. You are required to file a tax return. 3. You were either: a. Under age 18 at the end of 2018, b. Age 18 at the end of 2018 and didn’t have earned income that was more than half of your support, or c. A full-time student at least age 19 and under age 24 at the end of 2018 and didn’t have earned income that was more than half of your support. (Earned income is defined later. Support is defined below.) 4. At least one of your parents was alive at the end of 2018. 5. You don’t file a joint return for 2018.
2018 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)
What counts as unearned income
For purposes of the 2018 Kiddie Tax (Form 8615), unearned income is defined as all taxable income other than earned income. This includes taxable interest, ordinary dividends, capital gains and 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 received as the beneficiary of a trust (other than earned income). In contrast, earned income consists of wages, tips, and other payments received for personal services performed. The Kiddie Tax applies to a child's unearned income over $2,100 if the child meets certain age requirements. If a child has both earned and unearned income, the IRS provides a worksheet to determine the amount subject to the tax. Understanding what counts as unearned income is essential for determining whether Form 8615 must be filed and calculating the tax owed under the Kiddie Tax rules.
For Form 8615, “unearned income” includes all taxable income other than earned income. 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.
2018 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 children who are 18 years old, or who are full-time students aged 19 through 23, the kiddie tax applies only if their earned income was not more than half of their 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 support, amounts provided by the child, the parents, and other people all count. A scholarship, however, is specifically excluded from support if the child is a full-time student. This means a college student whose tuition is covered by a scholarship does not have that scholarship treated as support when measuring whether earned income exceeded half of support. The test is designed so that the kiddie tax reaches young adults who are still financially dependent on their parents, while allowing self-supporting students and workers to be treated as ordinary taxpayers.
Support. Your support includes all amounts spent to provide you with food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. To figure your support, count support provided by you, your parents, and others. However, a scholarship you received isn’t considered support if you’re a full-time student.
2018 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)
Reporting the child's income on the parent's return instead
Instead of filing Form 8615, a parent may elect to report the child's interest, ordinary dividends, and capital gain distributions directly on the parent's own return by filing Form 8814. If the parent makes this election, the child does not have to file a separate return or attach Form 8615. The instructions caution, however, that combining the child's income with the parent's can push that income into a higher bracket, so the federal income tax on the child's income - including on qualified dividends and capital gain distributions - may end up higher than it would have been under the regular kiddie-tax computation. Families should compare the two approaches before choosing. The election is available only for interest, ordinary dividends, and capital gain distributions; other types of unearned income still require the child to file Form 8615.
Your parent may be able to elect to report your interest, ordinary dividends, and capital gain distributions on his or her return. If your parent makes this election, you won’t have to file a return or Form 8615. However, the federal income tax on your 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.
2018 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
Form 8615 exists because a child's unearned income above $2,100 is not necessarily taxed at the child's own often-lower rate. Instead, the tax on that excess is figured by reference to the tax rate that would apply if the income were included on a parent's return. In other words, the child's personal income-tax bracket is only the starting point; the form recalculates the tax on the child's unearned income using the parent's marginal rates, which are typically higher. The purpose is to prevent families from shifting investment income to a child's return solely to take advantage of the child's lower bracket. The form must be used whenever the child is under age 18, and in certain situations where the child is older - specifically, when an 18-year-old or a full-time student aged 19 to 23 did not have earned income exceeding half of support.
Purpose of Form Use Form 8615 to figure your tax on unearned income over $2,100 if you are under age 18, and in certain situations if you are older. See Who Must File, later.
2018 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
For the 2018 tax year, a child whose tax is calculated on Form 8615 may still owe the alternative minimum tax (AMT). The AMT is a separate tax system that ensures high-income taxpayers pay at least a minimum amount of tax. If the child's tax is figured on Form 8615, they may owe this tax and must use Form 6251 to calculate it. In addition, the child may be subject to the Net Investment Income Tax (NIIT), which is a 3.8% tax on the lesser of net investment income or the excess of modified adjusted gross income over the threshold amount. The child uses Form 8960 to figure the NIIT. These taxes apply independently of the kiddie tax rules, so passing the kiddie tax threshold does not exempt the child from these other obligations.
If your tax is figured on Form 8615, you may owe the alternative minimum tax. For details, see Form 6251, Alternative Minimum Tax—Individuals, and its instructions. Net Investment Income Tax If your tax is figured on Form 8615, you may be subject to the Net Investment Income Tax (NIIT). NIIT is a 3.8% tax on the lesser of net investment income or the excess of your modified adjusted gross income (MAGI) over the threshold amount.
2018 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
Under Internal Revenue Service rules for 2018, if a parent's income changes after the child's return is filed, the child's tax must be refigured using the adjusted amounts. When the tax changes as a result, the child must file Form 1040X to correct the return. This requirement also applies if the child elects to modify the tax on unearned income using the tentative tax based on the parent's tax rate. The rule ensures that the kiddie tax calculation reflects the parent's actual income, since the child's tax depends on the parent's tax bracket. Any change in the parent's income that affects the parent's tax liability triggers the obligation to amend the child's return and pay any additional tax or claim a refund.
If your or your parent’s income changes after your return is filed, the tax must be refigured using the adjusted amounts. If your tax changes, file Form 1040X to correct your tax.
2018 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. 2017-58 (IRS)
- Unearned income reduction amount
For taxable years beginning in 2018, 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.
2018 Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income (IRS)
- Unearned income filing trigger
1. You had more than $2,100 of unearned income.