If your dependent receives SSI, this alone won't disqualify you from claiming her as a dependent, but additional rules do apply. She can't contribute more than half of her own support, and she can't claim a dependent of her own. She also can't file a joint tax return if she's married.
Supplemental Security Income, or SSI, is a program administered by the Social Security Administration to provide benefits to a select group of Americans: those who are blind, disabled or age 65 and older. These individuals must additionally have little or no income and limited other financial resources. If this sounds like someone who's close to you, you might wonder if you can claim her as a dependent on your tax return. Can you claim someone as a dependent who’s on SSI? Yes, if you and your dependent meet some rules.
A Basic Rule for All Dependents
The tax code recognizes two kinds of dependents: qualifying children and qualifying relatives. The rules are slightly different for each, but one rule applies to both: Qualifying children and qualifying relatives must be citizens of the U.S. or U.S. nationals or residents. Alternatively, they can be residents of Mexico or Canada.
The Rules for Qualifying Children
A qualifying child can be no older than age 18, as of the last day of the tax year, or he must be under age 24 if he’s a full-time student. An exception to the age rule exists if he’s permanently and totally disabled. He must generally live with you for more than half the year. Temporary absences, such as living away at school, don’t count. The IRS presumes that he’s going to return to your home eventually.
The dependent must be related to you, although the IRS defines the word “related” loosely. He can be a foster child placed with you by a state or county agency, or a stepchild. He can be your sibling or even a half-sibling, or a descendant of any of these individuals. But he can’t use his own money to pay for more than half of his own support.
The Rules for Qualifying Relatives
Some qualifying relatives must live with you all year, but others, like your parents, can live elsewhere as long as you pay for more than half of their support needs. All told, about 30 different relatives are exempt from the must-live-with-you rule. Also, you must pay for more than half of their support needs if they live with you.
And there’s an income cap for qualifying relatives – they must earn less than $4,150 as of the 2018 tax year. And they can’t be claimed as a dependent by any other taxpayer.
Can You Claim Someone on SSI?
Assuming your dependent meets all the other rules, she can collect SSI and you can still claim her as a dependent. The only interaction is with the income and support rules. You must account for her SSI benefits in the equation of paying more than half of her living expenses. If your dependent receives $8,000 in SSI payments a year, and if you use that money to contribute to your household or her household, her total living expenses would have to be $16,001 or more for her to qualify as your dependent.
If you dedicate all $8,000 of her SSI payments to your monthly bills, and if you provide $8,001, you’ve paid more than half. If you don’t use your dependent’s benefits toward household bills – maybe you place the money in savings or in a trust for her – you don’t have to account for it in the calculations.
What About a Qualifying Relative’s Income Limit?
You don’t have to account for your relative’s SSI benefits when figuring the rule of less than $4,150 income, either. SSI is tax-exempt income, so it doesn’t count toward that total.
Can Someone on SSI File Taxes?
There’s nothing to stop your dependent from filing a tax return of his own. The question is, why would he? If SSI is his only income, this isn’t taxable, so there’s no need to file a return. That said, if he does file a return for some reason, he cannot claim a dependent of his own. Doing so would disqualify him as your dependent. Neither can he file a joint tax return with his spouse if he happens to be married.
And here’s one final caveat: That SSI income won’t qualify him for certain tax credits, assuming he’s filing a return to claim one, such as the Earned Income Tax Credit. Qualifying for the EITC depends on having earned income, and SSI isn’t earned income. He would have to work in some capacity to collect earned income, and depending on how much he earned, this could disqualify him from eligibility for SSI.
- TurboTax: Rules for Claiming a Dependent on Your Tax Return
- H&R Block: My Family Members Receive Social Security and Supplemental Security Income (SSI)
- IRS: Disability and Earned Income Tax Credit
- IRS: Regular and Disability Benefits
- Social Security Administration: Supplemental Security Income (SSI) Overview
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