There are two issues here.
1. Income vs. support. A child's income does not matter, for whether she can be a dependent or not. (Income matters for other dependents, but not children*). The support test for a child is different than for other dependents. The support test is that the child must not have provided more than half of his own support**.
2. What do you mean by SSI? Supplemental Security Income (SSI) or Social security Disability income (SSDI)? SSI is welfare and is not considered the child's money. That is, SSI is third party support, and not support provided by the child. So, the parent can claim the child as a dependent without regard to how much support SSI provides. SSDI is the child's income/money and the money spent on support counts as support provided by the child. The child will get form SSA-1099 for SSDI, but not SSI.
*There are two types of dependents, "Qualifying Children"(QC) and
standard ("Qualifying Relative" in IRS parlance even though they
don't have to actually be related). There is no income limit for a QC but there
is an age limit or disability requirement, a relationship test and a residence
test. Only a QC qualifies the taxpayer for the Earned Income Credit, the
Child Tax Credit. They are interrelated but the rules are different for each.
**The support test for a Qualifying Relative dependent is that the taxpayer, who wants to claim him , must have provided more than half his support.
A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:
1. He is under age 19, or under 24
if a full time student for at least 5 months of the year, or is totally &
permanently disabled
2. He did not provide more than 1/2 his own support. Scholarships and Welfare (including SSI) are
considered third party support and not as support provided by the child.
3. He lived with the parent (including
temporary absences such as away at school) for more than half the year
So, it doesn't matter how much he earned. What matters is how much he spent
on support. Money he put into savings does not count as support he spent on him
self.
The support value of the home you provided is the fair market rental value
of the home plus utilities & other expenses divided by the number of
occupants.
