Congress passes new kiddie tax on college students
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.