The Internal Revenue Service allows you to take deductions for dependents on your tax return. There are a complicated series of rules dealing with claimed dependents, and the receipt of any Social Security benefits by those dependents may further complicate the process. Normally, however, the receipt of Social Security benefits will not, by itself, preclude dependent status.
Claiming Social Security income and / or disability pay will not automatically make you ineligible for dependent status on a tax return. As long as you meet the requirements established by the IRS for dependent status, you can still be claimed on another individual's tax return.
IRS Dependent Guidelines
If you want to claim someone as a dependent, they must be related to you; they must be a citizen or a legal resident of the United States; and they must not file a joint tax return with another taxpayer. The IRS also allows residents of Canada and Mexico to be claimed as dependents if the other conditions are met, such as if they are under the age of 19 – or 24 for full-time students – and if they meet certain support requirements.
Assessing Income Limits
The IRS also limits the taxable income level of dependents. That income cannot exceed $4,050 for 2017 tax returns unless you are a qualifying child. A percentage of Social Security benefits may be counted as taxable income, depending on such factors as filing status and income level. If someone has sufficient combined income to pay taxes on their benefits, they probably would not be eligible as dependents. The tax rules apply to Social Security disability or retirement benefits; Supplemental Security Income is not taxable under any circumstances.
Evaluating Support Considerations
To claim someone as a dependent, you must also provide at least half his support during the year. If Social Security accounts for more than half of the money he relied on for food, shelter and other necessities, then you can no longer claim him as a dependent. You would have to show the IRS that the support you provide is worth more than the Social Security; since the average for retirement benefits was $1,404 and $1,197 for disabled workers in 2017, this is a difficult hurdle to overcome in many cases.
Effect on Benefits
Remember that claiming someone as a dependent will not affect their eligibility for any form of Social Security benefit, nor the benefit amount. That is determined by their work history and earning level, and the amount of money they have paid in to the Social Security system through payroll taxes. Once someone has qualified for Social Security disability, they continue earning those benefits until they reach retirement age, or until their medical condition improves in the view of the Social Security Administration. Once you begin drawing retirement benefits, your monthly benefit remains set – with yearly cost-of-living adjustments – until your death.
- Social Security Administration: Taxes and Your Social Security Benefits
- IRS: Dependents & Exemptions 1
- Social Security Administration: Fact Sheet
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Founder/president of the innovative reference publisher The Archive LLC, Tom Streissguth has been a self-employed business owner, independent bookseller and freelance author in the school/library market. Holding a bachelor's degree from Yale, Streissguth has published more than 100 works of history, biography, current affairs and geography for young readers.