Childs Social Security

[arlo]

The child receives social security because her father is getting social security because of a disability.
Is the childs social security reported on her parents return or on her return or is it not reportable at all

[Gretel]

It depends. Assuming the child doesn't have any other income SS benefits are not reported...BUT they need to be taken into account for support purposes if someone wants to claim the child.

[arlo]

I found my answer in a search of childrens social security

Report on childs return not on parents return

[arlo]

childs social security

Thanks greta, Child has a W-2 with withholding, so will file.

[FEDUKE404]

Definitely income of the child

Social Security benefits (child receives until ~18 YOA due to disability of parent) can only go on the child's income tax return.

In most cases, of course, that income would be tax free. You process the SSA 1099 income the same as you would on an "adult" income tax return. If the "child" had sufficient income, there is always the possibility some of the SS benefits could be taxable. This could particularly be true if, with the first payment, the child received a significant amount of retroactive benefits (disability claims often go "backward" to a specified date when the person was deemed disabled).

(I won't even think about the scenario of any Form 8615 issues that could arise! )

Gretel's point is worth note: There is the real possibility that the funds received could tilt the "support" table significantly.

Oh yes: If the parent/guardian is not already aware of it, fully expect a fairly complicated document to arrive every couple of years where the parent/guardian certifies, subject to perjury constraints, exactly WHERE the money received was specifically spent for benefit of the child. KEEP RECORDS!!

FE

[BOB W]

Anybody know what would be considered an OK expenditure from the child's account that would not be a violation in the eyes of SS?

[Traveling EA]

Anybody know what would be considered an OK expenditure from the child's account that would not be a violation in the eyes of SS?

I have a couple of clients whose minor children get SS. The checks wind up going into savings/investments for the use for college. The amount put into savings does not count as support.

[FEDUKE404]

Accounting for Social Security benefits paid to a child via parental disability

Anybody know what would be considered an OK expenditure from the child's account that would not be a violation in the eyes of SS?

You can look around here ( http://www.ssa.gov/pubs/10076.html ) for relevant information.

The tab marked "Representative Payee Income and Expenses Worksheet" will give you some idea of the information that the SSA requests for a child, under age 18, who is receiving Social Security benefits due to a parent's disability.

This excerpt is of some relevancy:

First, you must make sure the beneficiary’s day-to-day needs for food and shelter are met. Then, the money can be used for any of the beneficiary’s medical and dental care that is not covered by health insurance, and for personal needs, such as clothing and recreation. If there is money left after you pay for the beneficiary’s needs, it must be saved, preferably in an interest-bearing account or U.S. Savings Bonds.

By carefully reading the information, you can see how these rules COULD likely affect the tax-related "support test." Everyone's situation differs, so the parent/guardian probably should contact the SSA for more guidance.

The Representative Payee Accounting Form is sent by a third party (on more or less an annual basis) to the responsible adult. There are also other items of paperwork which the child's school may have to document for the SSA.

Hope this helps!

FE

[Burke]

I have a trust client whose sole beneficiary is one of these. Child lives with guardian (who is not trustee) in their home. SS in excess of $8K. Also qualifies for Medicaid. Also receives income from trust for monthly support, plus any other expenditure child wants (car, etc.). But they claim him every year. I don't know what they do with the SS money. And I don't know how he qualified for Medicaid, either, since trust would pay any medical expense.

[JoshinNC]

Taxabke SS for a child

can create "kiddie tax". Taxable SS income to a child is "investment income" in calculating kiddie tax requirements.