TaxGuyBill
Level 15
12-07-2019
05:55 AM
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Good point. If the kid was a non-dependent, they would get the full $12,000 Standard Deduction, so $0 of taxable income.
If the kid is a dependent, then they only get the lower $1050 (?) Standard Deduction for Unearned income, and the rest of the taxable income would be subject to Kiddie Tax.
Because mom has very low income (and therefore may not qualify for Child Tax Credit or EIC), it seems like in this situation the result could be better if the kid is NOT a dependent.
If the kid is a dependent, then they only get the lower $1050 (?) Standard Deduction for Unearned income, and the rest of the taxable income would be subject to Kiddie Tax.
Because mom has very low income (and therefore may not qualify for Child Tax Credit or EIC), it seems like in this situation the result could be better if the kid is NOT a dependent.
