Are SSI Benefits for Children Taxable to the IRS?
- The SSI program is a federally funded program that is administered by the SSA. The program provides a monthly monetary benefit to low income individuals who meet all eligibility requirements. For a child to be eligible, she must be under age 18 or under the age of 22 if regularly attending school. In addition, a child must be considered blind or disabled. Disabled, according the SSA, for a child means that she has a mental or physical impairment that results in marked and severe functional limitations, and the impairment has lasted, or is expected to last, for a year or more or result in the child's death.
- If you are receiving SSI benefits on behalf of a child, those benefits are not considered to be income, according to the IRS. As such, the amount received during the year does not need to be reported on your income tax returns and is, therefore, not taxed.
- A child for whom you are receiving SSI benefits may be the basis for claiming a tax exemption or claiming tax credits on your tax returns. If the child meets the required "qualifying child" tests, you may claim an exemption, which will reduce the amount of income on which you are taxed. In addition, you may be able to claim the child and dependent care credit, the child tax credit and the earned income credit, which will also reduce your tax liability or even provide you with an additional refund. The qualifying child tests include a support test, which requires that you provided more than half the support for the child during the year. Because SSI income is not taxed, that income is not counted for the support test.
- If you would like to apply for SSI for a child, you must do so over the telephone or in person. You cannot complete an application for SSI over the Internet. Contact the SSA or visit a local office (ssa.gov). If you have specific questions about your tax situation, contact a tax professional or the IRS by telephone or in person (IRS.gov/contact/index.html).
