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Social Security benefits and Kiddie Tax

MikeB_CPA
Level 4

I have a client whose minor daughter receives SS survivor benefits from a deceased parent.  Does anyone know whether or not the SS benefits received by the minor are considered unearned income as it pertains to the kiddie tax?  The only reference I can find addresses SS benefits related to disabilities which are not considered unearned income for this purpose.  Any insights will be appreciated.  Thanks!

Michael B.

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MikeB_CPA
Level 4

Excellent point about the taxable component of the benefit.  In this case, none will be taxable.  Thanks very much.

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8 Replies 8
PATAX
Level 9

I do not think that I have ever encountered this situation. Having said that, I can never recall reading anywhere that SS benefits received by a minor would have an effect on the kiddie tax. ... I may be wrong but that is just my opinion.

MikeB_CPA
Level 4

Thanks very much.  Appreciate your thoughts.

TaxGuyBill
Level 14

Yes, if it is 'taxable' it is unearned income subject to the Kiddie Tax.

But it doesn't become 'taxable' unless there is a significant amount of other income on the tax return.

MikeB_CPA
Level 4

Excellent point about the taxable component of the benefit.  In this case, none will be taxable.  Thanks very much.

View solution in original post

PATAX
Level 9

That would be a "significant amount" of income for a "kid".... I do not think there are that many kids in that situation.

IRonMaN
Level 15

Their unemployment benefits probably kicked them into that situation.😬

Armpit sniffer. Yup, checked out the help wanted ads and found the job. With my nose, how can I go wrong?
PATAX
Level 9

Excellent point Iron Man... will this nonsense ever come to an end?

IRonMaN
Level 15

Not anytime soon.

Armpit sniffer. Yup, checked out the help wanted ads and found the job. With my nose, how can I go wrong?