In which of the following situations, if any, will the kiddie tax not apply?
A)The child is married but does not file a joint return.
B)The child has unearned income of $2,100 or less.
C)The child has unearned income that exceeds more than half of his (or her) support.
D)The child is under age 24 and a full-time student.
E)None of these.

Question

Quizplus · Accepted Answer

The kiddie tax does not apply if the child's unearned income is $2,100 or less. This is because the tax is designed to prevent parents from shifting large amounts of investment income to their children to take advantage of the child's lower tax rate. If the unearned income is at or below this threshold, the income is not subject to the higher tax rates that would apply under the kiddie tax rules.

In Which of the Following Situations, If Any, Will the Kiddie