If a child is under age 18 and has net investment income exceeding $2,000,the excess is taxed as if it were the income of the parent.

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This is known as the "kiddie tax" rule, which applies to children under age 18 (or age 19-23 if a full-time student) who have investment income above a certain threshold. The excess amount is taxed at the parent's tax rate, rather than the child's rate, to prevent parents from shifting investment income to their children to take advantage of lower tax rates.

If a Child Is Under Age 18 and Has Net