22 Mar My child gets survivor benefits. Is it reported on a tax return?

Q. My husband died recently and my child receives $2,500 a month in survivor’s benefits. Given that she’s a minor, I am receiving her benefits and saving on the side for her college. Do I need to file a tax return for the benefits? Does it go on my return?
— Mom

A. We’re sorry to hear about the loss of your husband.

There are a few things to know for this situation.

Even though your child is a minor, you do not need to report any of your child’s income on your tax return, said Patricia Daquila, a certified financial planner and certified public accountant with Peapack Private Wealth Management in Summit.

Legally, this income belongs to your child and therefore it is only taxable to your child, she said.

Your child may possibly need to file a separate tax return, however, this is unlikely if the only income source is from Social Security survivor benefits, Daquila said.

“Your child’s Social Security income would be tax free if one-half of the Social Security income that is received, in addition to any other taxable and tax-exempt income, did not exceed $25,000,” she said.

Taxable income includes investment income and wages if your child worked a part time job.

“In your case, one-half of your child’s Social Security income is $15,000,” Daquila said. “If your child did not have any other income that exceeded an additional $10,000, then your child would not need to file a tax return and your child’s Social Security would be tax-free.”

To be sure, check with a tax advisor who can look at your entire financial situation.

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This story was originally published on March 22, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.