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William Orr, CRPC®
Financial Planner
WillO Financial Solutions
8888 Keystone Crossing, Suite 500
Indianapolis, IN 46240
Phone: 317-708-5589
Cell: 317-750-9964
Email: william.orr@prudential.com
July/August 2024
Kiddie Tax 2024
If your child has investment or other unearned income above a certain threshold, that income may be subject to the kiddie tax.
For 2024, the first $1,300 of a child’s unearned income is tax-free. The next $1,300 of unearned income is taxed at your child’s tax rate. Any additional earnings above the $2,600 threshold are taxed at the child’s or parents’ tax rate, whichever is greater.
What Qualifies as Unearned Income?
A child’s unearned income may include:- Taxable interest
- Dividends
- Capital gains
- Taxable scholarships
- Income produced by gifts from grandparents
- Income from custodial accounts
Exceptions
The kiddie tax does not apply to children who spend their own earned income for more than half the cost of their support. Children who are married and file a joint return are also not subject to the tax. Your tax professional can provide more information.
Life insurance is issued by The Prudential Insurance Company of America, Newark, NJ, and its affiliates. WillO Financial Solutions is not affiliated with Prudential Financial. WillO Financial Solutions sells insurance products of Prudential Financial's affiliated insurance companies in addition to products of non-affiliated insurance companies. WillO Financial Solutions is authorized to sell and service certain insurance products of Prudential Financial companies as well as use this material. WillO Financial Solutions and its representatives do not render tax or legal advice. Please consult your own advisors regarding your particular situation. Offering financial planning and investment advisory services and programs through Pruco Securities, LLC (Pruco), under the marketing name Prudential Financial Planning Services (PFPS), pursuant to a separate client agreement. Offering insurance and securities products and services as a registered representative of Pruco, and an agent of issuing insurance companies. 1-800-778-2255.
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