US tax on dependents
Your child is your dependent for US tax purposes if they are a US citizen, under 19 (or 24 and in full-time education), and you pay more than half of their support. In the years before 2018, you were able to claim a tax-free personal exemption for each of your children, which was deductible against taxable income. This is no longer the case as all personal exemptions have been scrapped from 2018.
US children are subject to US tax on their worldwide income. It is possible that your child will need to file their own US tax return, however in many cases you are able to elect to include your child’s income on your tax return, if they are your dependent and meet other conditions.
If your child's interest, dividends and other unearned income totals more than $2,100, amounts exceeding this may be subject to 'kiddie tax' rates. The idea behind these rules is to prevent parents from sheltering assets in their children’s name to benefit from the lower rates of tax. From 2018 onwards, if your child’s unearned income is in excess of $2,100 it will be taxed at rates applicable to trusts and estates, rather than at personal Income Tax rates. Trust rates hit the same top rate as individual rates (37%), but at $12,500 taxable income rather than $500,000. Earned income for dependents is taxed at their own marginal personal rates.