Kiddie Tax Calculator 2026 โ Child Investment Income Tax
Calculate how much tax your child owes on unearned income (dividends, interest, capital gains) under the 2026 kiddie tax rules. See which portion is taxed at parent's rate.
$
Dividends, interest, capital gains $
Wages, babysitting, lawn mowing $
After parent's deductions Examples:
$0
Child's Total Federal Tax
0%
Parent's Marginal Rate
$0
Tax on Unearned Income
0%
Effective Rate on Investment Income
Kiddie Tax Tier Breakdown
| Unearned Income Tier | Amount | Tax Rate | Tax Owed |
|---|
Child's Standard Deduction Calculation
How to Use This Kiddie Tax Calculator
Enter your child's unearned income (dividends, interest, capital gains from UTMA/UGMA accounts), their earned income, age, and your own taxable income. The calculator applies the 2026 kiddie tax rules to show exactly how much of your child's investment income will be taxed at your rate.
The Kiddie Tax Formula (2026)
Child's Standard Deduction = max($1,350, earned_income + $450), capped at $16,100
Net Unearned Income = unearned_income โ $1,350 (exemption)
First $1,350 of net unearned income โ taxed at child's rate (10%)
Remaining net unearned income โ taxed at parent's marginal rate
Net Unearned Income = unearned_income โ $1,350 (exemption)
First $1,350 of net unearned income โ taxed at child's rate (10%)
Remaining net unearned income โ taxed at parent's marginal rate
Example
Emma, age 20 (full-time student), receives $8,000 in dividends. Parent's marginal rate: 24%.
Child's standard deduction: $1,350 (no earned income)
Net unearned income: $8,000 โ $1,350 = $6,650
First $1,350 taxed at child's 10% rate = $135
Remaining $5,300 taxed at parent's 24% rate = $1,272
Emma's total kiddie tax: $1,407
Effective rate on investment income: 17.6%
Child's standard deduction: $1,350 (no earned income)
Net unearned income: $8,000 โ $1,350 = $6,650
First $1,350 taxed at child's 10% rate = $135
Remaining $5,300 taxed at parent's 24% rate = $1,272
Emma's total kiddie tax: $1,407
Effective rate on investment income: 17.6%
Extended
UTMA/UGMA Investment Planning
See at what investment levels the kiddie tax erodes the benefit of holding assets in a child's name
UTMA/UGMA Investment Planning โ Tax by Account Size
Tax on unearned income at various investment levels, compared to paying tax yourself. Highlights the point where the kiddie tax eliminates the advantage.
| Annual Unearned Income | Tax in Child's Name | Tax in Parent's Name | Annual Savings | Worth It? |
|---|
Frequently Asked Questions
What is the kiddie tax?
The kiddie tax is a federal rule that taxes a child's net unearned income (investment income above a threshold) at the parent's marginal tax rate rather than the child's lower rate. Congress enacted it to prevent wealthy parents from shifting investment income to children to take advantage of their lower tax brackets.
Who is subject to the kiddie tax in 2026?
The kiddie tax applies to: (1) children under age 19 at year-end, or (2) full-time students age 19-23 at year-end โ provided their earned income does not exceed half their support. Children under 18 are subject regardless of earned income. Once a child turns 24 or is not a full-time student and turns 19, the kiddie tax no longer applies.
What are the 2026 kiddie tax thresholds?
In 2026, the first $1,350 of a child's unearned income is tax-free. The next $1,350 (from $1,350 to $2,700) is taxed at the child's own tax rate (typically 10%). Any unearned income above $2,700 is taxed at the parent's marginal tax rate โ which is the core of the kiddie tax.
How does a child's standard deduction work?
A dependent child's standard deduction in 2026 is the greater of $1,350 or their earned income plus $450, but capped at $16,100 (the regular standard deduction). So a child with $5,000 in wages gets a $5,450 standard deduction, shielding all earned income from tax. A child with no earned income gets only $1,350.
Should I put investments in my child's name to save taxes?
The kiddie tax limits this strategy significantly. Only the first $1,350 of unearned income is truly tax-free, and the next $1,350 benefits from the child's lower rate. Above $2,700, you're paying your own marginal rate anyway โ so the advantage disappears. For children 19+ who are not students, or for earned income (e.g., paying a child to work in your business), more tax planning opportunities exist.