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Another portion of earnings were taxed at the youngster's tax rate.
The kiddie tax was created in 1986 to keep parents from sheltering income by putting accounts in the names of their lower-taxed kids.
In its original form, a portion of investment earnings held by a child were tax-free.
On that day, the Tax Increase Prevention and Reconciliation Act took effect with a provision to keep the parents' tax rates in effect until the youngster turns 18.
But the readjusting of the age limit didn't end there.
Relief arrived once the child turned 14 and the excess earnings were again taxed at the child's lower rate.
On May 17, 2006, however, the kiddie tax effectively grew up.
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