Are Disability Benefits Taxable on Children Under 18?

The federal tax system takes into account income received at any age. That means a minor child may owe taxes, depending on the source and amount of his income. Although some adults pay taxes on Social Security disability benefits, a child under 18 is not eligible for disability, only Supplemental Security Income.

Disability Eligibility

The IRS taxes Social Security retirement and disability benefits, depending on the beneficiary's filing status and income level. For minor children, Social Security disability is not available. The minimum age for disability is 18, and only workers who have paid in to the system through payroll taxes are eligible. Children may be eligible for Supplemental Security Income benefits, however.

SSI Benefits

To draw SSI benefits, a child would have to show a severe disability that interferes with normal activities of daily living. Reports from medical providers and teachers can support a child's SSI claim, which goes through the same review process as a traditional Social Security disability claim. If the claim is denied, it can be appealed all the way to a Social Security hearing before an administrative law judge.

Means Test

SSI is a means-tested program; if family resources or income are above the limits, Social Security will deny the claim. If someone in the household is earning wages, Social Security will offset the SSI benefit $1 for every $2 of earnings. If the income is "unearned" (welfare benefits, unemployment compensation, workers' compensation), the benefit is offset dollar for dollar. For all beneficiaries, the basic monthly SSI benefit stood at $710 a month as of 2013; some states supplement this amount with an additional payment.

SSI and Taxes

SSI benefits don't need to be reported to the IRS, as they are not subject to state or federal taxes. However, if a child receives benefits on the disability eligibility of a parent, those benefits have a slim chance of being subject to income tax: a child must be unmarried to collect these dependent benefits, and the combination of half the Social Security benefit and the child's other income would have to be greater than $25,000 in the tax year in order for a portion of the benefit to be taxed.

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About the Author

Founder/president of the innovative reference publisher The Archive LLC, Tom Streissguth has been a self-employed business owner, independent bookseller and freelance author in the school/library market. Holding a bachelor's degree from Yale, Streissguth has published more than 100 works of history, biography, current affairs and geography for young readers.

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