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Paul Sobotta, CLU®, ChFC®, CFP®, RICP®
Financial Planner
CA Insurance Lic. #4169793
Kyle Sobotta, CFP®
Financial Planner
Prudential Advisors
205 Washington Street
Arcadia, WI 54612
Phone: 608-323-7032
Fax: 608-323-7964
Email: paul.sobotta@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.
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 companies. 1-800-778-2255. Prudential and its representatives do not give tax or legal advice. Please consult with your own advisors regarding your particular situation. Prudential, the Prudential logo, and the Rock Symbol are service marks of Prudential Financial Inc., and its related entities, registered in many jurisdictions worldwide. Prudential Advisors is a brand name of The Prudential Insurance Company of America and its subsidiaries.
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