The kiddie tax rule exists in the United States of America and can be found in Internal Revenue Code § 1(g), which "taxes certain unearned income of a child at the parent's marginal rate, no matter whether the child can be claimed as a dependent on the parent's return".
Children are usually in a lower tax bracket than their parents and grandparents, which makes them the likely receiver of the shifted income.
The kiddie tax was originally enacted as Internal Revenue Code §1(i), but in 1990 it was redesignated as §1(g) by the Omnibus Budget Reconciliation Act, P.L.
Earned income, defined in §911 (d)(2), is exempt from the kiddie tax provision.
To qualify, those ages 19 to 23 who are full-time students must have earned income that is less than 50 percent of their support.