Social security payments to children.
If the Social Security (SS) payments, including SS disability, were under his/her SS number (as they usually are), it does not get reported on your return. If it does need to be reported, it would go on his/her individual return. If that was his/her only income, it does not get reported at all. She does not need to file a tax return.
SS is only taxable & reportable when added to sufficient other income. Social security only becomes taxable, when his income, including 1/2 his social security, reaches $25,000
You may still claim him, as a dependent, as long as he is not providing more than 1/2 his own support (including the social security being spent on him). Any part of his SS $ put into savings does not count as support.
Note that the requirement is not that you provide more than 1/2 his support (as it is with non child dependents , but only that he didn't provide 1/2.
The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.
The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf
