Disabled Daughter Receives SSI; Can I still claim ...
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Disabled Daughter Receives SSI; Can I still claim her as a Dependent?

My 25 year old daughter is totally and permanent disabled.  Her only income is SSI, but her SSI benefits are enough to provide more than half of her total support.  

 

I'm struggling to understand whether I can claim her as a dependent.  I was initially under the impression that I cannot (because her SSI benefits are being used for provide for more than half of her total support).  

 

However, I've come across some publications online saying that SSI does NOT count as "own support", and is instead treated like TANF (i.e. support from the state).  In that case, a child who is paying half of her own support using her SSI benefits is NOT treated as paying half of her own support when it comes to determining whether she is a Qualifying Child - so the parent can still claim her as a dependent.

 

Is that correct?  It is very confusing and I cannot find a definitive answer anywhere.  My daughter otherwise meets all the criteria for me to claim her as a dependent, except for this "providing half of her own support" factor - and it's not clear whether SSI benefits count as "own support".  

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Disabled Daughter Receives SSI; Can I still claim her as a Dependent?

State benefits provided to a person in need, such as welfare, food stamps or housing, are generally considered support provided by state. A proposed rule on which taxpayers may choose to rely treats governmental payments made to a recipient that the recipient uses, in part, to support others are treated as support of the others provided by the recipient, whereas any part of such a payment used for the support of the recipient would constitute support of the recipient by a third party.

 

For example, if a mother receives Temporary Assistance for Needy Families (TANF) and uses TANF payments to support her children, the proposed regulations treat the mother as having provided that support. If a child receives Social Security benefits, and uses them for the child’s own support, the benefits are considered to be provided by the child.

 

TANF

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Level 2

Disabled Daughter Receives SSI; Can I still claim her as a Dependent?

Thank you.  I saw this as well.  Unfortunately this particular IRS publication is rather poorly-written and obfuscates the issue even more for me:  

 

The last sentence in the first paragraph ("whereas any part of such a payment used for the support of the recipient would constitute support of the recipient by a third party") seems to suggest that if a SSI recipient, e.g. my daughter, uses her SSI benefits to provide for her own support, then it constitutes support of my daughter by a third party (i.e. not my daughter providing her own support).  But the example in the following paragraph ("If a child receives Social Security benefits, and uses them for the child’s own support, the benefits are considered to be provided by the child") seems to contradict that.  Under that example, if my daughter's SSI benefits are being used for her support, then she is considered to be providing her own support.  

 

Maybe I'm reading too much into this and making it more complicated than it is?  

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Expert Alumni

Disabled Daughter Receives SSI; Can I still claim her as a Dependent?

My understanding is also that SSI payments are considered support provided by the child.

 

But have you actually put together a support calculation for your daughter?

 

An IRS worksheet is available in IRS Publication 501.  Go to the index at the bottom of the document and click on the worksheet listed under ‘W’.

 

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Level 2

Disabled Daughter Receives SSI; Can I still claim her as a Dependent?

Thanks.  I re-read the publication that ColeenD3 linked.  I think I understand it now.  When it says that a child's social security benefits are considered support paid by the child, it is attempting to make a distinction between social security benefits and state/local benefits (such as TANF and SNAP).  The former is treated as support paid by the beneficiary.

 

I wonder if the fact that I'm my daughter's Representative Payee for her SSI makes any difference.  Social Security appoints Representative Payees to receive and manage the funds for beneficiaries who are unable to do so themselves.  I suppose it wouldn't make any difference since my daughter is still the beneficiary of the SSI, even though I'm the one who is actually receiving the payments on her behalf.  

 

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Expert Alumni

Disabled Daughter Receives SSI; Can I still claim her as a Dependent?

It does not make a difference as the custodian of her SSI payments.  The support test is the main factor.  Social security income is support provided by her through government assistance. 

 

You can only count what you pay from your income  which does not include the SSI and other assistance payments.

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Disabled Daughter Receives SSI; Can I still claim her as a Dependent?

I came across this article authored by a lawyer/CPA who claims that SSI is NOT counted as support provided by the qualifying child:

https://www.thetaxadviser.com/newsletters/2019/apr/tcja-definition-dependent-children-special-needs....

 

"Needs-based support, such as SSI, is not included as income nor counted as support provided by a qualifying child for this test. In addition, it is critically important to remember that qualifying child status also requires a residency requirement that is not required under the qualifying relative test; the qualifying child must live in the same household as the taxpayer for more than half the tax year.

 

By contrast, SSI is counted as support under the qualifying relative test. As a result, if a taxpayer's special needs child's sole source of income is SSI, the "dependent's status" will not be jeopardized under the qualifying child test, but requires further examination under the qualifying relative test as to whether the individual seeking dependent status has provided more than half of the qualifying relative's support."

 

The author is making a distinction between Qualifying Child (for dependent status) and Qualifying Relative, and stating that SSI is not considered support provided by the Qualifying Child.  


Is he simply mistaken?  

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