Which statement regarding the kiddie tax is not correct?

The statement about the child's tax rate being 10% for all income is not correct. In reality, the kiddie tax applies to unearned income of children and utilizes a tiered tax rate structure that reflects the parents' tax bracket for amounts exceeding the threshold. For earned income, children may benefit from the same tax rates that apply to individuals, starting at 10% for their income but increasing depending on their total earnings and the tax brackets applicable.

In contrast, the other statements describe components of the kiddie tax correctly. The standard deduction for a child can indeed involve a calculation based on earned income, usually following the formula of earned income plus an additional $450 but has a limit. The aspect of excess unearned income being taxed at the parents' rates also holds true, as it affects how income above a certain threshold is taxed. Finally, the kiddie tax indeed serves to limit the shifting of unearned income to children to take advantage of lower tax brackets, which is crucial for maintaining fairness in taxation across generations.