Tax Changes for 2016 - Kiddie Tax

Experienced Tax Accountant – For taxable years beginning in 2016, the amount that can be

used to reduce the net unearned income reported on the child's return that is subject to the "kiddie tax," is $1,050 (same as 2015). The same $1,050 amount is used to determine whether a parent may elect to include a child's gross income in the parent's gross income and to calculate the "kiddie tax." For example, one of the requirements for the parental election is that a child's gross income for 2016 must be more than $1,050 but less than $10,500.

For 2016, the net unearned income for a child under the age of 19 (or a full-time student under the age of 24) that is not subject to "kiddie tax" is $2,100.

If you would like any additional information please feel free to contact me.

Amare Berhie, Senior Tax Accountant

AB Tax Online

ABA Tax Accounting

amare@abataxaccounting.com

(651) 300-4777, (612)424-1540, (651) 621-5777