Many people with disabilities have dependents who are also supported through their Social Security Disability Insurance payments (SSDI). However, if you have a child or disabled parent who is currently on SSDI, you may be wondering whether you can claim them as a dependent.
Well, yes, you absolutely can. Although there are no specific SSDI programs for dependents, they do nonetheless receive benefits from someone else’s tax returns. Additionally, if you are an SSDI beneficiary with dependents, your dependents may also be eligible for benefits.
Keep reading below for more information.
What is SSDI?
SSDI is intended for those individuals who have paid Social Security taxes on their earnings while working but who have fallen ill or died before reaching the age at which they can start collecting regular Social Security payments.
Depending on their employment and income history, the amount of the monthly benefit to which they are entitled varies from person to person.
In addition, the monthly benefit amount for Social Security Disability Insurance is subject to periodic increases to account for the effects of inflation.
Only workers with disabilities that are expected to persist for at least a year or result in death are eligible for SSDI benefits. Additionally, the individual must be unable to work due to their condition.
There are a variety of medical illnesses that can qualify for disability payments; nevertheless, the government is notoriously picky about who gets those payments and under what circumstances.
The federal government also has a program called Supplemental Security Income (SSI) that can provide disabled people with monthly benefits. To qualify for SSI benefits, a person does not need to have worked previously, unlike with SSDI.
Moreover, SSI benefits are available to both children and adults. However, SSI beneficiaries are required to have limited resources and low incomes.
Who Is Considered to Be a Dependent?
The Social Security Administration generally recognizes the following individuals as qualifying dependents:
- Minors (those under 18 years old);
- High school students aged 18 or 19 (up to 19 years and 2 months old);
- Young people under the age of 22 who have a disability;
- Spouses who are above 62 and are currently unemployed.
The eligibility of one dependent does not affect the eligibility of another, and a dependent may be eligible for financial advantages that apply to the past, the present, the future, or all three.
With that said, there is one caveat: benefits payable to a dependent may be reduced if the record shows that more than the maximum permissible amount has been provided (usually 150% of the claimant’s total monthly payment).
Can Someone on SSDI Be Claimed as a Dependent?
Yes, they can. Dependents receive SSDI not through any regular programs, but through someone else’s tax returns. SSDI benefits for specific dependents of SSDI beneficiaries are discussed below in this section.
Surviving Spouse Benefits
Widows and widowers can get survivor benefits equal to up to 99.6 percent of the deceased worker’s benefit. To qualify for retirement benefits, a surviving spouse must be at least 60 years old, or 50 years old if disabled.
If the individual believes that their employment may result in a bigger sum, they may apply for their deceased spouse’s benefit at age 60 and then apply for a separate personal benefit at age 62.
Divorced Spouse Benefits
If you were married for at least ten years, you may be entitled to half of your late spouse’s benefit. A divorced spouse is eligible to receive the benefit at any time, even before their former partner claims it. You must be 62 or older to qualify for the benefit.
If you haven’t hit the normal retirement age, the divorce must have been finalized for at least two years.
Children and Grandchildren Benefits
Children may be eligible for Social Security disability payments either as the surviving dependents of a worker who has passed away or as the dependents of a parent who is still alive and receiving benefits for a disability.
For the child to be eligible, they must be under the age of 18, unmarried, or have a disability. In the case of a living parent, the benefit can be up to 50% of the parent’s benefit, and in the case of a deceased parent, it can be up to 75%.
Great-grandchildren are ineligible for this payment. However, grandchildren are eligible if they become dependent on a grandparent.
Disabled Children Benefits
A disabled child does not need a work history to be eligible for SSDI payments in their own right. The same principle applies in the case of an adult kid who develops a disability before the age of 22.
However, getting through the qualification procedure might be challenging. After approval, a child with a disability may be eligible to receive up to fifty percent of the benefit paid to their parent.
Dependent Parent Benefits
Some parents rely on their children for survival in more ways than one. If a deceased worker was 62 or older, his or her dependent parents may get up to 82.5% of the benefit. If both parents are dependent, the limit is lowered to 75%.
How to Report Dependent’s Benefits
Dependents’ Social Security benefits are exempt from taxation. Your child is the one who has the legal right to these Social Security benefits, so she is the only one who must pay taxes on them.
If they file a tax return, they must disclose these payments. This is the case regardless of how they receive the benefits, including direct deposit.
Your child does not have to pay taxes on their Social Security benefits as long as their provisional income is lower than the upper limit.
Therefore, some of your child’s Social Security benefits may be subject to taxation if they also receive other income. It’s possible that they also receive taxable scholarship money and wage income from their job.
Additionally, if you can file your child as a dependent on your tax return, the Social Security benefits they receive could be taken into consideration.
Conclusion
In conclusion, you can claim an SSDI beneficiary as a dependent, since they are receiving benefits through your tax returns.
So, if you have a dependent that is also currently receiving SSDI payments, you should report it in the same way.
