Kiddie Tax Calculator United States

What the kiddie tax calculator does

The calculator estimates the federal income tax on a child's unearned income under the kiddie tax rules. Enter the child's total unearned income, the parent's marginal tax rate and the child's own rate, and it splits the income into the part that is tax-free, the part taxed at the child's rate and the part taxed at the parent's rate.

Without the kiddie tax, a family could move income-producing investments into a child's name so the earnings were taxed at the child's low rate. The rule taxes part of a child's investment income at the parent's marginal rate, which removes most of that benefit while still leaving a small amount taxed lightly or not at all.

How the kiddie tax is structured

The child's unearned income falls into three tiers:

• The first slice is covered by an exemption and is effectively tax-free.
• The next slice, up to a set threshold, is taxed at the child's own rate.
• Everything above that threshold is taxed at the parent's marginal rate.

The calculator uses the current exemption amount and parent-rate threshold, which the IRS adjusts for inflation each year, along with the two rates you enter.

Only the top tier is taxed at the parent's rate. A child with a small amount of investment income may owe little or nothing, because most of it falls in the first two tiers. With more investment income, a growing share is taxed at the parent's rate.

What counts as unearned income

Unearned income comes from capital and not from work. It includes:

• Interest from savings accounts, bonds and certificates of deposit.
• Dividends from stocks and funds.
• Capital gains from selling investments.
• Rents, royalties and taxable distributions from trusts.

Earned income, meaning wages, salary and self-employment income from work the child actually does, is not subject to the kiddie tax. A teenager with a summer job is taxed on those wages under the normal rules, and only their investment income goes into the kiddie tax calculation. Custodial accounts such as UTMA and UGMA accounts produce exactly the interest, dividends and capital gains the rule targets, which is why families with these accounts often run into it.

Who the rules apply to

The kiddie tax generally applies to a child who is under 19 at the end of the year, or under 24 if a full-time student, as long as the child does not pay for more than half of their own support with earned income. There are further rules on the child's filing requirement and how the income interacts with the parent's return.

The tool assumes the child meets the age and support conditions. If you are unsure whether a child is subject to the rules in a given year, confirm that before relying on the result.

Reading your result

The output shows the estimated kiddie tax, the tax-free amount, the amount taxed at the parent's rate and the effective rate across all of the unearned income. Two children with the same investment income can owe very different amounts if their parents' rates differ, and the tier breakdown shows why.

The effective rate, total tax divided by unearned income, is usually well below the parent's marginal rate because the first two tiers are taxed lightly or not at all. As unearned income grows, more of it falls in the top tier and the effective rate moves closer to the parent's rate.

When to use this tool

• Estimate the tax on a child's investment or custodial account income.
• Plan the timing of capital gains inside a child's account.
• See how much of a child's income would be taxed at your rate.
• Set aside the right amount for tax before filing.

The exemption and threshold change each year and your marginal rate can change too, so recalculate when they move or when the child's investment income changes noticeably. A current estimate helps with year-end decisions such as whether to realize gains now or defer them.

The kiddie tax can also affect how you invest for a child. Growth holdings that pay little annual income, held for the long term, produce less unearned income each year and can keep more of the account below the parent-rate threshold. Some families use the tool to compare realizing gains over several years with realizing them all at once, so that less is taxed at the parent's rate each year. For decisions like these, a tax professional can give advice that fits your situation.

This is general information only and not financial or tax advice.

About This Kiddie Tax Calculator

Use this kiddie tax calculator to get an instant, accurate estimate. The figures follow official IRS guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.