I know this question has been asked and answered before but I am still perplexed on the situation.
I have an adult disabled son who receives SSI. In order to get the full amount of SSI we have to charge him rent. We charge him $300 a month. If you add up all our expenses and people living in the household this is my sons fair share of the household bills. I also put the money straight to the household bills. On the other questions people were told that they had to claim this money as taxable income because rent is considered taxable income. I would just like more clarification on the situation. SSI is suppose to be non-taxable income. So, once it leaves my sons bank account and goes into mine is that what makes it taxable? It should also be noted that we don't have a formal rental agreement.
One of the reasons why I am so confused about this situation is partly because of the Home Help Services (AHHS) program. I get paid by the state to help my son complete certain tasks because he is disabled. This income is reported to me and I put it on my tax return. However, this income is considered non-taxable. My understanding is the government is trying to give tax breaks to parents to try and reduce the need to place the disabled person in a facility that would end up costing the government much more money. If the IRS is willing to do that for parents, why would they then turn around and charge income tax on the $300 I get from my son's SSI?
I would also like to know if there is a section in the tax code that addresses the SSI and paying rent situation. I have been doing so much research but I can't seem to locate anything on the tax code about it.
Who decides if my son is paying rent or his fair share of the household expenses? It should also be noted that I have reviewed a tax guide that has been published for 49 years for people with disabilities. In this guide it says that shared household expenses are non-taxable and rent is taxable, but it doesn't clarify how you know which situation you have. Or by default is all the SSI paid as rent considered taxable and does the IRS code reference that specifically?
