Money Gifts to Minors

I found new rules on the irs.gov site regarding minors and income.

"Beginning in 2008, the age of children whose unearned income is taxed at their parent’s rate increased. For children under age 18 and certain older children, unearned income over $1,800 is taxed at the parent’s rate. These special tax rules apply to children who meet all of the following conditions:

1. The child had more than $1,800 of unearned income.
2. The child is required to file a tax return.
3. The child either:
a. Was under age 18 at the end of 2008,
b. Was age 18 at the end of 2008 and did not have earned income
that was more than half of the child’s support
c. Was over age 18 and under age 24 at the end of 2008 and was a full-time student who did not have earned income that was more than half of the child’s support.
4. At least one of the child’s parents was alive at the end of 2008.5. The child does not file a joint return for 2008."

There is more information available on their site. As a grandmother who is thinking of gifting a little $, I wanted to review the tax rules. These rules can vary year to year but my desire to provide for future education and needs feels important.

Bob and I will speak with the parents and ask if there are college funds established. That might be the place for our Christmas and birthday gifts. Some day our granddaughter and our grandson will appreciate the $ rather than the Barbie Doll or big wheel.

'til later