The Tax Cuts and Jobs Act (TCJA), enacted in December 2017, made some nasty changes.
One specific nasty change was to the so-called “Kiddie Tax.”
You see, the TCJA law changed the way in which the IRS taxed your children’s investment-type income.
This nasty change meant that your children likely had to suffer an enormous tax increase.
But wait! The Congress, changed its mind
and now things have gotten a lot better.
You’ll get the whole story when you read my new article titled Tax Tips: Congress Kills TCJA Kiddie Tax Changes.
Three ways our fact-filled article can help you:
- We’ll tell you the good news. After Congress passed the kiddie-tax laws in December 2017, they took a lot of heat. Much deserved heat! As a result, they responded. In December 2019 (two years later), Congress passed a new law that repealed the kiddie-tax changes and reverted to the old kiddie-tax rules. (You can choose which rules fit you best and even obtain tax refunds for 2018.) You’ll get all the important details when you read the full article.
- You’ll learn who must pay the kiddie tax. The kiddie tax applies to children with more than $2,100 of unearned income when the children’s status meets several criteria. We’ll tell you what they are when you read the full article.
- We’ll explain some kiddie-tax choices you can make. The Setting Every Community Up for Retirement Enhancement Act of 2019, also known as the SECURE Act, repeals the TCJA kiddie-tax rules for tax years 2020 and onward. Plus, the SECURE act returns the tax-calculation to the pre-TCJA calculation. The new law also gives you the option to calculate the kiddie tax using your tax rate for tax-years 2018, 2019, or both—the choice is yours. We’ll make all this crystal clear when you read the full article.