Dependent Child
How is a dependent child 's income
taxed?
Dependent children age 14 and over are taxed at the rates
for Single taxpayers.
Standard Deduction: A dependent child is entitled to a standard
deduction of:
The higher of:
- $850 (for 2006) or,
- $300 plus earned income (wages, salary, tips, etc.) up
to a maximum of $5,150.
Income in excess of the applicable standard deduction is
subject to tax. A dependent child is not entitled to a personal
exemption.
Child age 14 or over (Kiddie Tax does not apply):
All income in excess of the standard deduction is taxed at the
child's tax rate (single taxpayer).
Child under age 14:
| Type
of Income |
Amount of
Income |
Tax
Rate |
| Unearned income
only |
First $850
(standard deduction) |
No
tax |
| $850 -
$1,700 |
Child's tax
rate |
| Over
$1,700 |
Parent's
marginal tax rate |
| Earned income
only |
$5,150 or
less (standard deduction) |
No
tax |
| Over
$5,150 |
Child's tax
rate |
| Both earned and
unearned income* |
First $850
(standard deduction) |
No
tax |
| Excess over
standard deduction |
|
| · Unearned
income of $1,700 or less |
Child's tax
rate |
| · Unearned
income over $1,700 |
Parent's
marginal tax rate |
| · Earned
income |
Child's tax
rate |
Note: If the dependent child 's gross income is below
the standard deduction there is no tax due and no federal
income tax return is required to be filed.
| 
