What is the tax applied to income earned by a minor child known as?

The tax applied to income earned by a minor child is known as the Kiddie tax. The Kiddie tax rules were designed to prevent parents from shifting income to their children to take advantage of the children's lower tax rates. Under these rules, a certain amount of a child’s unearned income is tax-free, but any income exceeding that threshold is taxed at the parent's tax rate. This means that if a minor child has significant income, it is taxed more heavily than it would be under normal circumstances for their age.

In this context, the other options refer to different tax situations. Income tax is a broad term that applies to taxes on earnings for all individuals, including minors. The child tax credit is a benefit provided to parents for dependents that helps reduce tax liability but does not specifically apply to the income earned by minor children. Estate tax refers to taxes on the transfer of property after death and does not relate to the income earned by a minor child. Understanding these distinctions clarifies why the correct term in this scenario is the Kiddie tax.