Updated October 30, 2026. Quick answer: For tax year 2026 the kiddie tax amount is $1,350, per IRS Revenue Procedure 2025-32. A child’s net unearned income is figured after subtracting that amount plus a second amount that is $1,350 for a child who does not itemize, so $2,700 of unearned income (computed) is shielded before the parent-rate rules reach the rest. The 2027 version is on the kiddie tax for 2027, and the general rules are on the kiddie tax page.
The 2026 amount
Revenue Procedure 2025-32 says: “For taxable years beginning in 2026, the amount in § 1(g)(4)(A)(ii)(I), which is used to reduce the net unearned income reported on the child’s return that is subject to the “kiddie tax,” is $1,350.” The same Revenue Procedure notes the link to the standard deduction rule: “This $1,350 amount is the same as the amount provided in § 63(c)(5)(A), as adjusted for inflation.”
| Item | Tax year 2026 |
|---|---|
| First amount: reduces net unearned income (section 1(g)(4)(A)(ii)(I)) | $1,350 |
| Second amount: the greater of the first amount or the child’s directly connected itemized deductions | $1,350 if the child does not itemize |
| Total subtracted from unearned income when the child does not itemize | $2,700 (computed: 1,350 plus 1,350) |
| Gross income must be below this for the parental election | $13,500 (10 times $1,350) |
How net unearned income is figured
Section 1(g)(4)(A) defines it. Net unearned income is the child’s adjusted gross income not from earned income, over the sum of two items: “(I) the amount in effect for the taxable year under section 63(c)(5)(A) (relating to limitation on standard deduction in the case of certain dependents), plus” “(II) the greater of the amount described in subclause (I) or, if the child itemizes his deductions for the taxable year, the amount of the itemized deductions allowed by this chapter for the taxable year which are directly connected with the production of the portion of adjusted gross income referred to in clause (i).”
Example for a child who does not itemize (invented numbers): $3,000 (invented, for the computation) of interest and dividends and no earned income. Net unearned income is $300 (computed) (3,000 minus 1,350 minus 1,350). That $300 (computed) is the amount the parent-rate rules reach. The statute says the child’s tax is the greater of the ordinary tax or a computation that adds the child’s share of the parent’s tax: “(ii) such child’s share of the allocable parental tax.” The statute defines the base for that share: “the tax which would be imposed by this section on the parent’s taxable income if such income included the net unearned income of all children of the parent to whom this subsection applies”.
Which children it covers
The statute applies the rule to a child who “has not attained age 18 before the close of the taxable year” (with an age-based rule for older students), where “either parent of such child is alive at the close of the taxable year” and the child does not file a joint return. For the AMT, the Revenue Procedure also limits a child’s exemption: “the exemption amount under §§ 55(d) and 59(j) for purposes of the alternative minimum tax under § 55 may not exceed the sum of (1) the child’s earned income for the taxable year, plus (2) $9,750.”
The parental election
A parent can sometimes report a child’s interest and dividends on the parent’s own return. On the dollar range, the Revenue Procedure says: “thus, a child’s gross income for 2026 must be more than $1,350 but less than $13,500.” The statute adds that the gross income must come “only from interest and dividends” and that no estimated tax payments were made in the child’s name. The forms are covered on the Form 8814 page and the Form 8615 page.
Common mistakes
- Treating $2,700 as a separate statutory figure. It is the $1,350 amount counted twice for a child who does not itemize, and a child with large directly connected itemized deductions can subtract more.
- Assuming the whole of a child’s investment income is taxed at the parent’s rate. The first $2,700 for a non-itemizing child is subtracted first, and the amount reached is net unearned income.
- Using 2026 amounts for 2027 income. The next year’s amount is on its own page.
Related: the kiddie tax for 2027, the kiddie tax page, the Form 8615 page, and the Form 8814 page.
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Answer againSources
- Internal Revenue Service, Rev. Proc. 2025-32, tax year 2026 inflation-adjusted amounts, as modified by the One, Big, Beautiful Bill Act: www.irs.gov
- 26 U.S.C. 1, Tax imposed (U.S. Code, 2024 edition, U.S. Government Publishing Office): www.govinfo.gov
Read from the primary documents linked above on October 30, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.