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What Parents Should Know About the Kiddie Tax

ARTICLE | March 26, 2026

Authored by Vasquez + Company

If you have minor children or college students in your household, you're likely focused on child tax credits, education deductions, and other family-related tax breaks. But there's another rule that deserves your attention: the "kiddie tax." This often-overlooked provision can subject your child's investment income to your higher tax rate, not theirs, and it can apply well into young adulthood. Understanding when the kiddie tax applies, how it's calculated, and what planning strategies can help you manage it is essential to avoiding unexpected tax bills and making informed decisions about transferring assets to your children.

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Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.  

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