These are the new kiddie tax rates for tax years 2018-2025.
Sec. 1(j)(4)(B) . and Sec. 1(j)(2)©
10% of taxable income up to ETI* plus $2,550
24% of taxable income that exceeds the sum of ETI* and $2,550—but doesn’t exceed ETI + $9,150
35% of taxable income that exceeds the sum of ETI* and $9,150—but doesn’t exceed ETI + $12,500
37% of taxable income that exceeds the sum of ETI* and $12,500
*Earned Taxable Income (ETI) = taxable income minus NUI. (ETI is not the same as Earned Income, which is, in most cases, just total compensation received for services.) ETI is relevant only to computation of kiddie tax. ETI is a misnomer for children whose only income is unearned income; despite having no income earned from labor, they will still have ETI.
ETI = [(Earned income + unearned income) - dependent’s computed standard deduction] - NUI
Net Unearned Income (NUI) = unearned income minus $2100 (almost always comes to $2100).
NUI is unearned income that exceeds $1,050 PLUS the greater of $1,050 or the child’s itemized deductions related to the unearned income. NUI cannot exceed the child’s taxable income.
NUI = Unearned income minus allowance (usually $2100)