Children with 1099R Income

[Twin Turbo Z]

Have a child (under 12) drawing a State pension form a deceased parents account. Surviving parent claims the child (CTC). In the past the child got hit around 10% tax. Under new tax code it looks like they going to get taxed at around 24% this year !!! Thats crazy !!! Anyone else have this issue this year or am I missing something ?

[Lion]

Kiddie Tax is now at estate tax rates and not the parents' tax rates, so yes we all have been alerting our clients since the TCJA was passed. I have a couple Kiddie Tax returns to prepare this week, but I long ago explained to the parents why their children's taxes will be higher. If you are surprising the parents now, do study the flow so you can explain it well (how much is not taxed, how much at the child's rate, how much at estate rates, the difference in estate brackets vs. the parents' brackets, etc.).

[Twin Turbo Z]

Yeah I have my crib notes all done explaining what happened, to prepare them for the shock. Thanks for the reply. Stinks though. Just like the truckers paid on W2's (per diems and misc exp. loss), had many unhappy truckers this year.

[ATSMAN]

I have 2 (separate) clients where their minor kids are getting IRA income from their Grandparents IRA. I warned them last year that 2018 would be different, so they bumped up the Fed withholding.