Reference: HR1, Tax Cuts and Jobs Act

The “Kiddie Tax” was simplified under the new Act… and not in a good way.  This tax on the unearned income (e.g. interest, dividends, capital gains, etc) of children will no longer be taxed at the parents rates.  Instead, it will be taxed on the return of the child using the rates for trusts and estates.

Unearned income above $2,550 will be taxed at 24%; above $9,150 at 35%; above $12,500 at 37% federal tax rates.

Although the IRS has not yet issued regulations as of January 2018, apparently the parents will no longer have the option of reporting the unearned revenue of their dependent children on the parents return.