I have a client aged 12 who received a 1099-R pension distribution of $3850.00 from his deceased father pension plan in 2018. When I filed the child's 2018 tax return that income was classified as unearned income and subject to the trust tax rates. Did the recent tax changes passed on December 2019 exempt the retirement distributions from a deceased parent from kidde tax income?
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The new rules do not exempt the retirement distributions they just go back to the old kiddie tax rules where unearned income is taxed at the parent's tax rates. You can elect to apply the new rules to 2018. -
The Kiddie tax is going to require IRS instruction, because it was repealed starting 2020, but may be extended to 2018. here is a quote from forbes:
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the new version of the kiddie tax introduced the Tax Cuts and Jobs Act (TCJA) has been repealed. The effective date is supposed to begin with the 2020 tax year, but you can elect to have it apply to the 2018 and 2019 tax years (expect guidance from IRS on this).Comment
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terryrats - The kiddie tax was not repealed. They just replaced the TCJA changes with what the pre 2018 kiddie tax rules were.Comment
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Sorry, meant to say the change was repealed starting after 2019, so we will have to have some guidelines from IRS as to 2018 and 2019 taxes according to forbesLast edited by terryats; 01-08-2020, 02:57 PM.Comment
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