Question

Child who has unearned income of $2,100 or less cannot be subject to the kiddie tax.
t
f

Answer 1

No, a child who has unearned income of $2,100 or less can still be subject to the kiddie tax if they have other unearned income that pushes them over the threshold.

Step-by-step explanation:

No, the statement is incorrect. A child who has unearned income of $2,100 or less can be subject to the kiddie tax. The kiddie tax is a tax law provision that applies to children under a certain age (usually under 18 years old) who have unearned income over a certain threshold (currently $2,200 in 2021).

The kiddie tax is designed to prevent parents from shifting their investment income to their children to take advantage of lower tax rates. So, if a child has unearned income of $2,100 or less, they could still be subject to the kiddie tax if they have other unearned income that pushes them over the threshold.