How a child's investment income is taxed across the three IRC §1(g) bands.
Open the Child Tax Estimator tool →When a child has investment income, a special rule (IRS Form 8615) stops families from sheltering it in the child's low bracket. It stacks in three bands: the dependent standard deduction shelters the first slice tax-free; the next slice (up to twice the base) is taxed at the child's own low rate; and everything above that is taxed at the parents' marginal rate, as if it sat on top of the parents' income.
Enter the child's unearned income (interest, dividends, capital gains), any earned income (wages, always taxed at the child's rate), and the parents' top marginal rate. We use the 2026 dependent standard-deduction base ($1,350) and the federal single brackets for the child's-rate band. This is an estimate — the exact Form 8615 interaction with the parents' return has edge cases, and states tax this differently — so check the result against the form or a preparer.
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