Kiddie Tax Calculator

The kiddie tax is a rule that taxes a portion of a child's unearned income (interest, dividends, and capital gains) at the parent's marginal rate instead of the child's lower rate. It exists to stop families from shifting investment income to a child to have it taxed in a low bracket. It applies to a child's unearned income above an annual threshold, reported on IRS Form 8615, and it is the main tax drawback of a custodial UTMA account, whose earnings can trigger it.

For 2026, the first $1,350 of a child's unearned income is offset by the dependent's standard deduction and is effectively tax-free. The next $1,350 (up to $2,700 total) is taxed at the child's own rate, which for these small amounts of ordinary income is the 10% bottom bracket. Only unearned income above $2,700 is taxed at the parent's marginal rate. These thresholds are the IRS figures for 2026 (Rev. Proc. 2025-32), unchanged from 2025.

It generally applies to a child under 19, or a full-time student under 24, whose earned income does not exceed half of their own support, when the child has unearned income above the annual threshold. In other words, it targets a dependent child's investment income, not wages from a job. If your teen's only income is a summer paycheck, the kiddie tax does not touch it; it is the interest, dividends, and gains from savings and custodial accounts that count.

An UTMA is a taxable account, so the interest, dividends, and capital gains it generates each year can be hit by the kiddie tax once they cross the threshold. A 529, by contrast, grows tax-free and is never taxed as long as withdrawals go to qualified education costs. For a college goal, that difference compounds. This calculator shows the annual tax an UTMA's earnings might trigger; the 529 vs UTMA comparator weighs the two accounts over the full timeline.

This tool models ordinary unearned income, like interest, taxed at ordinary rates. Qualified dividends and long-term capital gains receive preferential rates (often 0% for a child at these income levels), which the calculator does not apply, to avoid a falsely precise number. If a large share of the child's unearned income is qualified dividends or long-term gains, the real tax is usually lower than shown. For an exact figure, use IRS Form 8615 or a tax professional.

No. The calculator runs entirely in your browser and stores nothing on our servers. There is no email box and no sign-up. Your inputs are only reflected in the page's web address so you can bookmark, share, or print your result; clear the link and they are gone.