Is SSI Taxable to Children?
- Supplemental security income is a general tax-supported joint federal and state-funded program that provides monthly income to needy adults 65 and older and to the disabled children of low-income families. To qualify for benefits, applying adults must show proof they have total resources, not including their homes and automobile. of $2,000 or less )and monthly incomes of not more than $1,000 or $1,640 if blind). Disabled children must be under age 18 and also meet strict disability definitions to qualify for income assistance.
- Under the supplemental security income program, eligible-disabled children receive tax-free monthly benefits. In addition to income and total resource limitations, applicants must also meet the strict definition of disability for children. The Social Security Administration mandates that the child cannot be engaged in any "substantial work;" have a physical or mental condition that results in "marked and severe functional limitations" that have lasted, or are expected to last, at least one year or result in death.
- OASDI is the proper appellation for the federal program commonly referred to as "social security income." It differs markedly from SSI in several ways. Although both plans provide income benefits to children, OASDI is an entitlement program funded by payroll taxes, not a welfare plan. Under OASDI, children's benefits may be taxable; a child doesn't have to be disabled to quality and a child's eligibility is contingent on the parent meeting the work history requirement to be fully insured for death, retirement and disability benefits.
- Children of fully insured workers under the Social Security system are entitled to monthly benefits based on the parent's "primary insurance amount," the amount that the parent would be entitled to receive at full retirement age based on his work history. The children's benefits are triggered with the retirement, disability or death of the worker who has dependent children under the age of 18. Benefits will be paid for each child until age 18, or age 19 if still in high school. Benefits for any disabled child of a qualified worker will be continued for life providing the disability continues and the individual does not earn above the "substantial" monthly earnings limit which for 2011 is $1,000 or $1,640, if blind.
