In 2023, if a child's unearned income exceeds what amount, it may be subject to the kiddie tax?

The correct answer regarding the amount of unearned income that may subject a child's income to the kiddie tax in 2023 is $2,500.

The kiddie tax is designed to prevent parents from shifting income to their children to take advantage of the child's lower tax rate. It applies to children under the age of 19, or under 24 if they are full-time students, and basically applies to unearned income such as interest, dividends, and capital gains.

For the tax year 2023, children can earn up to $2,500 in unearned income without it being taxed at their parent's rate. Any unearned income above this threshold may be subjected to the kiddie tax rules—meaning that the excess amount could be taxed at the parent's higher tax rate. This framework ensures that families cannot circumvent tax liability by distributing income among children, who may be in a lower tax bracket.

To summarize, the amount that a child's unearned income must exceed to trigger kiddie tax is indeed $2,500, reflecting the IRS's attempt to ensure equitable taxation among families.