The Kiddie Tax, enacted as a result of the Tax Reform Act of 1986, was originally put in place to prevent wealthy parents from shifting income-producing securities to children in lower or zero tax brackets. This seemingly negative intent of the law has led to a lack of awareness of income-shifting strategies that remain available to families and that can be a powerful tax-savings tool when implemented over a period of years.
4 ways the ‘Kiddie Tax’ can work for you and your family | WTOP