Kiddie Tax

The rules have changed to allow more flexibility for paying taxes on unearned income such as dividends, interest, and capital gains over $2,200 for children under age 24. You now can elect to pay taxes under the old method based on the parent's tax rate instead of the trust rate. The trust rate reaches the max rate of 37% on income over $12,750. You can also amend 2018 to make the election to be taxed on the parent rate for that year.