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Kiddie Tax
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The "Kiddie Tax" only applies to UNEARNED income, typically from investments held in the child's name such as interest, dividends, and capital gain distributions. Increase in AGE for Kiddie Tax The Kiddie Tax is expanded to apply where the child turns age 18, OR if the child is a full-time student under age 24 before the end of the tax year. This is effective for tax years beginning after May 25, 2007. For calendar year taxpayers, the new Kiddie Tax rules first go into effect in year 2008. Exempt Amount of UNEARNED Income The Kiddie Tax only affects UNEARNED income above the annual threshold. For 2008, only UNEARNED income above $1,800 is affected by the Kiddie Tax. |
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Click here to return to "What's NEW for Tax Year 2008?" |
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