About the Kiddie Tax Calculator
This kiddie tax calculator estimates the 2026 federal income tax on a child’s investment income — interest, dividends, capital gains distributions, custodial (UTMA/UGMA) account earnings and taxable trust distributions. Under the kiddie tax, a child’s unearned income above $2,700 is taxed at the parent’s marginal rate instead of the child’s own, usually much lower, rate. Enter the child’s earned and unearned income and the parent’s taxable income and filing status to see the tax and how much the rule adds.
It follows the Form 8615 method with 2026 figures from Rev. Proc. 2025-32: the first $1,350 of unearned income is covered by the dependent standard deduction, the next $1,350 is taxed at the child’s rate, and net unearned income above $2,700 is stacked on top of the parent’s taxable income. The dependent standard deduction is the greater of $1,350 or earned income plus $450, capped at the regular single deduction ($16,100).
The kiddie tax applies to children under 18 at year-end, 18-year-olds whose earned income is not more than half their support, and full-time students aged 19–23 under the same support test, provided at least one parent is alive and the child does not file jointly. The calculator taxes all income at ordinary rates; if much of the income is qualified dividends or long-term gains, the actual tax can be lower. It assumes no other children of the same parent have net unearned income.
With the default inputs, the child’s total federal tax is $1,301.00. Change any value above to recalculate instantly.
How to use the kiddie tax calculator
- 1Enter the child’s total investment (unearned) income for 2026.
- 2Add any wages or self-employment income the child earned.
- 3Choose the parent’s filing status and enter the parent’s taxable income.
- 4Review the child’s total tax and the portion taxed at the parent’s rate.
- 5Compare with the tax at the child’s own rates to see what the kiddie tax costs.
Formula and method
The child’s standard deduction as a dependent is the greater of $1,350 or earned income plus $450 (not more than $16,100). Net unearned income (NUI) is unearned income minus $2,700, but never more than the child’s taxable income. The tax on NUI is the extra tax the parent would pay if NUI were added to the parent’s taxable income, using the parent’s filing status and 2026 brackets.
The rest of the child’s taxable income is taxed at single-filer rates. Form 8615 then compares this total with the tax on all the child’s taxable income at the child’s own rates and uses the larger figure. All income is taxed at ordinary rates in this simplified version; qualified dividends and long-term capital gains would use the 0%/15%/20% rates on both the parent and child portions.
- NUI
- Net unearned income taxed at the parent’s rate
- PTI
- Parent’s taxable income
- T_parent
- Tax using the parent’s filing status (2026 brackets)
- T_single
- Tax using single-filer 2026 brackets
Worked examples
$8,000 of UTMA income, parents in the 22% bracket
The child’s $1,350 standard deduction leaves $6,650 of taxable income. Unearned income above $2,700 — $5,300 — is taxed at the parents’ 22% rate ($1,166), and the remaining $1,350 at the child’s 10% rate ($135), for $1,301. At the child’s own rates the tax would be only $665, so the kiddie tax adds $636.
Teen with a job and $5,000 of dividends, single parent
With $6,000 of wages the standard deduction is $6,000 + $450 = $6,450, leaving $4,550 taxable. Net unearned income is $5,000 − $2,700 = $2,300, taxed at the parent’s 24% rate ($552). The other $2,250 is taxed at 10% ($225), for a total of $777.
Small savings account — no kiddie tax
Unearned income of $2,500 is below the $2,700 threshold, so none of it is taxed at the parents’ rate. After the $1,350 standard deduction, $1,150 is taxed at 10%, or $115.
Frequently asked questions
What is the kiddie tax threshold for 2026?+
For 2026 the first $1,350 of a child’s unearned income is tax-free, the next $1,350 is taxed at the child’s rate, and unearned income above $2,700 is taxed at the parent’s marginal rate (Rev. Proc. 2025-32).
Who is subject to the kiddie tax?+
Children under 18 at year-end, 18-year-olds whose earned income does not exceed half their support, and full-time students aged 19 to 23 under the same test — if they have unearned income over $2,700, at least one living parent and do not file a joint return.
Can parents report a child’s income on their own return?+
Yes, with Form 8814, if the child’s only income is interest, dividends and capital gain distributions, gross income is over $1,350 and under $13,500 for 2026, and no estimated payments or withholding were made in the child’s name. It can raise the parents’ AGI, so compare both ways.
Does earned income count toward the kiddie tax?+
No. Wages and self-employment income are always taxed at the child’s own rates. Earned income does increase the child’s standard deduction to earned income plus $450, which can shelter some investment income too.
How can families reduce the kiddie tax?+
Common approaches include holding growth investments that pay little until sold, timing sales for after the child ages out, using 529 plans or Roth IRAs (for children with earned income), and keeping custodial account income near the $2,700 threshold.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.