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Congress passes new kiddie tax on college students

(May 25, 2007) - As part of the Iraq funding bill that passed today in Congress and is expected to be signed by the President, 18-year-old children and certain college students above the age of 18 will become subject to the kiddie tax.

The bill (H.R. 2206) expands the kiddie tax to apply to children who are 18 years old or who are full-time students over age 18 but under age 24. The expanded tax will apply only to children whose earned income does not exceed one-half of the amount of their support.

The expanded kiddie tax will become effective for taxable years beginning after the date of enactment, meaning 2008 for nearly all individual taxpayers.

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