Legal Guardianship income

[Melk1949]

State selected us to be legal guardians of 12 year old grandson in December of 2021. He gets a SS deposit monthly based on his fathers income. The direct deposit comes as “Payor [wifes name] for [grandson name]”. The initial payment included a massive back payment of four years income. It just sits in an insured interest account and we are trying not to use it on him but save it towards his college costs. 1) Do we need to claim in on are 2022 income taxes and if not 2) do we need to file income taxes for him in his name?

Thank you

[melj1]

You aren't taxed on Social Security Benefits for your Dependents. Since your child is the person with the legal right to receive these Social Security Benefits, they're only taxable to her. These benefits are reported on her return if she files a return. This is true even if the benefits are deposited in your account. You will only need to file a return for your grandson only if he has additional income. A child generally won't receive enough additional income to make the child's social security benefits taxable.