SS Benefits question

[Pacun]

Client makes 80K and has two minor children (11 and 12 years old).

 

The children receive 18K each from social security because their father passed away a couple of years ago.

 

Part of that money is put on CDs and they each have $800 interest income.

 

That's all the income the children made. Any tax return to be filed for the kids? Any kiddie taxes involved?

 

I believe the answer to both is no but I want to double check.

They didn't provide more than 50% of their own support.

[Pacun]

Real life situation

[Gail in Virginia]

I have never filed a return for children receiving social security unless they had sufficient other income to file.  The statement is in their name and SSN.  I think that their is a form that their guardian might have to file showing what happened to the money, but it has nothing to do with taxes.  But I agree with your thinking on this situation, Pacun.

[jklcpa]

I agree too. No filing is necessary because none of the SS is taxable, so they have only the $800 to consider for determining whether or not they need to file and also for the kiddie tax.  The kids are not subject to the kiddie tax in your example either.

[Pacun]

Thank you.

[Terry D EA]

Well the parents could elect to have the children's interest income included in their tax return.

[Pacun]

Well the parents could elect to have the children's interest income included in their tax return.

why would you elect if the child doesn't have to file?

[Terry D EA]

They don't have to but they can. Can be used to stop the IRS from looking for a return on the SS# that the interest was reported on.

[Lion EA]

If you're going to report the income to stop matching when no return is due, then report it on the kid's return where there will be no increased tax liability.  Don't add income to the parents' returns.