Who pays taxes on UGMA accounts?
Before the child reaches the age of majority, the custodian (often a parent, grandparent or guardian) is responsible for any tax liabilities associated with the UGMA account. Thereafter, the now-adult is responsible for their own tax obligations related to the UGMA account.
UGMA accounts may require the filing of a separate tax return for the minor if the income exceeds certain thresholds. Consult with a tax professional to ensure compliance with tax laws and to understand the specific reporting requirements.
The taxation of Uniform Gift to Minors Act accounts depends on the nature of the income generated within the account and the age of the minor.