what is the kiddie tax 
the kiddie tax is a tax imposed on income unrelated to employment earned by individuals 18 years of age or under or dependent full time students under age 24 introduced as part of the tax reform act of 1986 it is designed to stop parents from registering investments in their children s name to avoid paying taxes the kiddie tax threshold adjusts each year for inflation in 2023 unearned income surpassing 1 250 is subject to the child s tax rate and anything above 2 500 is taxed at the guardian s tax rate 1