Social Security benefits and Kiddie Tax

[MikeB_CPA]

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.

[PATAX]

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.

[TaxGuyBill]

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]

Thanks very much.  Appreciate your thoughts.

[MikeB_CPA · Accepted solution]

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

[PATAX]

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

[IRonMaN]

Their unemployment benefits probably kicked them into that situation.😬

[PATAX]

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

[IRonMaN]

Not anytime soon.