The kiddie tax applies to children under age 19 and full-time college students younger than age 24. It is a tax on the unearned income of minors and young adults. In 2011, a dependent child’s unearned income over $1,900 is taxed at his or her parents’ marginal tax rate. The only way that young adults under age 24 can avoid the kiddie tax is to be at least partially financially emancipated from their parents. To avoid the kiddie tax, they must provide more than one-half of the total cost of their support from their own earned income sources (salary, wages, or net income from a business). Unearned income from securities is excluded.
More information can be found from the IRS at .
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