earned taxable income
(4) Special rules for certain children with unearned income (A) In general In the case of a child to whom subsection (g) applies for the taxable year, the rules of subparagraphs (B) and (C) shall apply in lieu of the rule under subsection (g)(1). (B) Modifications to applicable rate brackets In determining the amount of tax imposed by this section for the taxable year on a child described in subparagraph (A), the income tax table otherwise applicable under this subsection to the child shall be applied with the following modifications: (i) 24-percent bracket The maximum taxable income which is taxed at a rate below 24 percent shall not be more than the sum of— (I) the earned taxable income of such child, plus (II) the minimum taxable income for the 24-percent bracket in the table under paragraph (2)(E) (as adjusted under paragraph (3)) for the taxable year. (ii) 35-percent bracket The maximum taxable income which is taxed at a rate below 35 percent shall not be more than the sum of— (I) the earned taxable income of such child, plus (II) the minimum taxable income for the 35-percent bracket in the table under paragraph (2)(E) (as adjusted under paragraph (3)) for the taxable year. (iii) 37-percent bracket The maximum taxable income which is taxed at a rate below 37 percent shall not be more than the sum of— (I) the earned taxable income of such child, plus (II) the minimum taxable income for the 37-percent bracket in the table under paragraph (2)(E) (as adjusted under paragraph (3)) for the taxable year. (C) Coordination with capital gains rates For purposes of applying section 1(h) (after the modifications under paragraph (5)(A))— (i) the maximum zero rate amount shall not be more than the sum of— (I) the earned taxable income of such child, plus (II) the amount in effect under paragraph (5)(B)(i)(IV) for the taxable year, and (ii) the maximum 15-percent rate amount shall not be more than the sum of— (I) the earned taxable income of such child, plus (II) the amount in effect under paragraph (5)(B)(ii)(IV) for the taxable year. (D) Earned taxable income For purposes of this paragraph, the term “earned taxable income” means, with respect to any child for any taxable year, the taxable income of such child reduced (but not below zero) by the net unearned income (as defined in subsection (g)(4)) of such child.