Are Social Security Survivor Benefits for Children Considered Taxable Income?

Social Security survivor benefits for children are considered taxable income only for the children who are entitled to receive them, even if the checks are made out to a parent or guardian. Most children do not make enough in a year to owe any taxes.

Key Takeaways

  • Social Security survivor benefits paid to children are taxable for the child, although most children don’t make enough to be taxed.
  • If survivor benefits are the child’s only taxable income, they are not taxable.
  • If half the child’s benefits plus other income is $25,000 or more, the benefits are taxable.
  • Parents or guardians who receive benefits on the child’s behalf are not responsible for taxes.

However, survivor benefits are taxed if half of the child’s benefits in a year (added to any other income the child earns in the year) is enough to require him or her to file a tax return and pay taxes. If half of the annual benefits plus the child’s other income exceeds a base amount determined by the Internal Revenue Service (IRS) ($25,000 for 2020), then a portion of the benefits are taxable.

Social Security Benefits for Children

Social security benefits are paid to children if they have a deceased parent and are under 18 years old, or 19 years old if they’re enrolled full-time in elementary or secondary school. Other children, such as stepchildren, grandchildren, or adopted children, may also qualify for benefits. Children can receive benefits at any age if they were disabled before 22 years old and remain disabled. Children can receive up to 75% of the deceased parent’s benefit.

Social security benefits for children are never treated as taxable income for the parent or guardian.

Parents Receiving Checks on Behalf of Children

Most checks for Social Security survivor benefits are made out to an adult, such as a parent, on the child’s behalf. The amount of the benefits does not affect the income tax of the parent. If both the parent and the child receive benefits, the amount designated for the eligible child is subtracted from the check to determine the parent’s tax liability. The only income a child receives that a parent can claim is dividend and investment income.

The child receiving the benefits may still be considered a dependent for tax purposes if they live with the parent for more than half the year, and the parent pays for more than half of their living expenses, such as food, housing, clothing, education, and medical care. As well, parents or guardians are responsible for filing and signing the return on the child’s behalf if they are required to file a return due to Social Security benefits.

Social Security benefits are reported to the IRS. The recipient of the benefits receives an SSA-1099 form in January, including amounts of all benefits received during the previous year. Again, the IRS does not treat Social Security benefits for children as income for the parent or recipient who receives the money on behalf of the child.

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