Under the kiddie tax law, all unearned income over the threshold is taxed at the parent’s marginal income tax rate rather than the child’s tax rate. In 2020, unearned income under $1,100 qualifies for the standard deduction, the next $1,100 is taxed at the child’s tax rate, which is very low—sometimes zero percent—and then anything in excess of $2,200 is taxed at the guardian’s tax rate, which could be as high as 37%.