Question: Are Social Security survivor benefits for children considered taxable income?

Answer:

Yes, under certain circumstances, although a child generally will not receive enough additional income to make the child’s Social Security benefits taxable.

  • The taxability of benefits must be determined using the income of the person entitled to receive the benefits.
  • If you and your child both receive benefits, you should calculate the taxability of your benefits separately from the taxability of your child’s benefits.
  • The amount of income tax that your child must pay on that part of the benefits that belongs to your child depends on the child’s total amount of income and benefits for the taxable year.

To find our whether any of the child’s benefits may be taxable, compare the base amount for the child’s filing status with the total of:

  • One-half of the child’s benefits.
  • All the child’s other income, including tax-exempt interest.

If the child is single, the base amount for the child’s filing status is $25,000. If the child is married, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits, for the applicable base amount and the other rules that apply to married individuals receiving Social Security benefits.

If the total of (1) one half of the child’s Social Security benefits and (2) all the child’s other income is greater than the base amount that applies to the child’s filing status, part of the child’s Social Security benefits may be taxable. You can figure the taxable amount of the benefits on a worksheet in the Instructions for Form 1040, Instructions for Form 1040A, or in Publication 915.

Additional Information:

  • Tax Topic 423 – Social Security and Equivalent Railroad Retirement Benefits
  • 42 CFR 435.603  for Medicaid  – ….determining ongoing eligibility for beneficiaries determined eligible for Medicaid – Medi-Cal coverage … financial methodologies set forth in this section ….renewal of eligibility for such individual under § 435.916 of this part, whichever is later.
    • (2) Income of children and tax dependents.
      (i) The MAGI-based income of an individual who is included in the household of his or her natural, adopted or step parent and is not expected to be required to file a tax return under section 6012(a)(1) of the Code for the taxable year in which eligibility for Medicaid is being determined, is not included in household income whether or not the individual files a tax return.
      (ii) The MAGI-based income of a tax dependent described in paragraph (f)(2)(i) of this section who is not expected to be required to file a tax return under section 6012(a)(1) of the Code for the taxable year in which eligibility for Medicaid is being determined is not included in the household income of the taxpayer whether or not such tax dependent files a tax return.

Copied from IRS.gov

Related Pages in Social Security Benefits – MAGI » Survivor Benefits Section

 

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