Key facts
- The "kiddie tax" applies specific tax rules to the unearned income of children.
- The "kiddie tax" often applies higher tax rates to children's unearned income.
- Parents and grandparents are being warned about the "kiddie tax."
- Individuals with high-deductible health plans face significant financial risk.
- Individuals with no health insurance face significant financial risk.
- A single unexpected medical procedure can lead to financial ruin for those with HDHPs or no insurance.
- Healthy workers are at risk from unexpected medical procedures.
- Financial hardship is a potential outcome for those with HDHPs or no insurance.
Parents and grandparents are being alerted to the financial implications of the "kiddie tax." This tax specifically applies certain rules to the unearned income of children, often at higher rates than might be expected. The unearned income of children is subject to these specific tax rules, which can result in a greater tax burden for families.
Separately, individuals enrolled in high-deductible health plans (HDHPs) or those without any health insurance are facing substantial financial risks. A single unexpected medical procedure could lead to significant financial hardship for these individuals. This risk is particularly pronounced for healthy workers who may not anticipate needing extensive medical care but could still face ruinous costs from unforeseen health events.