Do I Declare Dependent Adult Social Security Benefits on My Tax Return?

If your household contains dependent adults, their benefits may not be taxable.

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The Internal Revenue Service maintains a set of criteria that dictate the definition of a qualified dependent on your income tax return. The IRS also specifies the type of Social Security benefits subject to taxation. When a dependent adult lives with you, your tax filing responsibilities vary based on the type of income the dependent receives.

Dependent Adult Children

You can only claim a dependent exemption for select individuals over the age of 18 at the end of the tax filing year. If a permanently and totally disabled adult child lives with you for at least one-half of the year and provides less than one-half of his own support, you may list him as a dependent. However, when over half of the child's needs are met by Supplemental Security Income, you can't claim him as a dependent. He may also need to file his own income tax return if any additional income is received.

Qualifying Relative Dependent Exemptions

If your adult parents move in with you, you may be able to report them on your income tax return as a dependent exemption under the qualifying adult rules. The criteria governing qualifying adult eligibility mirror those for adult children with the exception of an additional rule limiting gross income to $3,800 or less per tax year. Unless your parents receive a minimum amount of Social Security retirement income, you can't claim them as a dependent. Instead, your parents can file their own income tax return or skip filing when they don't receive income from other sources, such as private retirement plans.

Reporting Requirements

Different tax filing rules apply to the various types of Social Security benefits. If the adult receives benefits based on a work record after retiring or becoming disabled, the Social Security administration sends out form SSA-1099 to report all benefits paid during the tax filing year. When the benefit is the only income for the year, the recipient doesn't need to file a tax return. However, if other earnings necessitate filing, the Social Security benefits must be reported on Form 1040. Supplemental Security Income benefits paid to the disabled never need to be reported as income on a tax return.

Tax Implications

SSI benefits are never taxed because they are not reported as income on the return. However, other Social Security payments, including those paid to disabled children based on a parent's working record, may be taxed if personal income exceeds a base level established each tax filing year. For example, as of 2013, if an individual received combined income in the $25,000 to $34,000 range, up to 50 percent of the benefit amount becomes taxable income. To determine a recipient's combined income, the IRS adds one-half of the Social Security benefit amount to the adjusted gross income total and any interest income earned.