Does child need to file tax return if SSDI (lump sum) is only income

[bradnyk]

Hi,

My five-year-old son received a $38,000 lump-sum child SSDI payment, mostly attributable to three prior years because of a long appeal process. He is my dependent but I understand that income is his and gets reported on his taxes, not mine. He has never filed taxes before because has never had any money paid to him before (neither earned or unearned). He has no other income except the $33,000. Going forward, he should receive about $1,300 monthly in SSDI ($15,600 annually).

In future years, I know he won't need to file any tax return with income of only $15,600 (let's assume he won't have income from another source at this age). But what about this year?

I know not all of this $33,000 is taxable, maybe none of it is because, I can allocate to prior years, right? Even if he filed no tax return for those years? But does he need to file *any* return at all, for the year in which the $33,000 lump sum was paid? It is over the limit for needing to file, right?

Thanks for any advice you have.

[Critter-3]

NO ... if that is his ONLY income in this and any other tax year it covered  then he does NOT need to file a return.

[bradnyk]

I understand, Right, no other income in any tax year it covered. Thank you!

[xmasbaby0]

When the ONLY income is from Social Security you do not have to file a tax return---even if it is above the standard deduction amount that would require a tax return to be filed if the income came from some other source such as a job.   His SSDI is not taxable now  nor does he have to put it on a tax return unless someday he has some sort of after school job, or other taxable income in addition to the Social Security ----then he would enter all of his income including the SSDI on a tax return.   And....his income does not go on your income tax return.

[bradnyk]

@Critter-3 @xmasbaby0 

Hey, follow up: he will have income on interest earned from the SSDI because it is deposited into an interest-bearing account. It could be maybe $900 or more because the retro payment was substantial due to the delay in winning the appeal. Does that amount of interest income matter? Otherwise the SSDI (plus that interest earned) is his only incom

[xmasbaby0]

$900 is not enough to require a return for "kiddie tax"---but you may want to be aware of kiddie tax in the future

https://ttlc.intuit.com/turbotax-support/en-us/help-article/small-business-processes/2021-kiddie-tax...

[bradnyk]

So basically if he gets $30k in retro ssdi from my disability, and earns say $800 (could be less) in unearned income on top of that from interest on the 30k, it still wouldn't mandate that he file his own return? 

[xmasbaby0]

No, it would not.

[bradnyk]

Thank you!