The Tax Cuts and Jobs Act has changed the kiddie tax rules for years 2018–2025. Certain children with unearned income are taxed at the rates paid by trusts and estates.
Unearned income includes capital gains, dividends and interest. Earned income from a job is never subject to the kiddie tax.
Although there are new complexities in calculating the kiddie tax, there are old elements that still apply. The Journal of Accountancy shows several examples to help practitioners understand the changes.