From: Pound Ridge, NY
Dear TaxMama,
If a child is receiving social security benefits due to his/her parent's
disability, is that child required to file his/her own tax return?
Specifically, one parent is very ill and has refinanced their home to get
money to live on.
Their mortgage interest is well in excess of their income. The three kids
(2 under 14) have investment income and social security income.
It would be beneficial to make the election to report the investment income
on the parent's return, but what to do with the social security?
Thanks for your help.
Christine
Hi Christine,
Typically, Social Security income isn't reportable until a taxpayer has
$25,000 in income. If the kids have less than that, you don't have to report
it.
The kiddie tax thing about putting the dividends on the parents' return
doesn't include the child's other income - like wages or passive income or
SSI.
If they have other taxable income, you'll need to file a return for the
child and report the dividends and interest using the parent's tax rate on
Form 8615.
Remember, you only need to report the dividend and interest income on the
parents return using Form 8814 or on the child's return using Form 8615 when
the income is over $1600 per child.
You can always run the numbers on the child's return including the SSI income
and see what comes up.
That's what I always do when I'm not sure.
Best Wishes,
Eva Rosenberg, MBA, EA
