Question

Which the following, if any, of is a correct statement relating to the kiddie tax in 2020?

	a.	If the parents are divorced, the income of the noncustodial parent is used to determine the allocable parental tax.
	b.	The components for the application of the kiddie tax are not subject to adjustment for inflation.
	c.	If the kiddie tax applies, the parents must include the income of the child on their own income tax return.
	d.	The kiddie tax does not apply if both parents of the child are deceased.

Answer 1

Answer: Option d) The Kiddie tax does not apply if both parents of the child are deceased.

Ecplanation:

The Kiddie tax applicable to dependent children who are above 19 and  between 19 to 23 year old, or Who are full-time students between the ages of 19 and 23.

The Kiddie tax child earned income totaling more thank half of the cost of their support.

The kiddie tax does not apply if both parents of the child are deceased.

Some of the features applicable to kiddie tax:

• If the parents are divorced, the income of the noncustodial parent is used to determine the allocable parental tax.
• The components for the application of the kiddie tax are not subject to adjustment for inflation.
• f the kiddie tax applies, the parents must include the income of the child on their own income tax return.

Thus, option d) is correct and reamining options are incorrect.