400.24.02 SOCIAL SECURITY BENEFITS AND THE REQUIRED TO FILE EXCEPTION

In making the initial determination whether a tax dependent is “required to file,” • Do not count Social Security benefits received by the child or adult child toward the tax filing threshold. Use other income (earned and/or other unearned income) in making the initial decision on “required to file” using the worksheet in the Appendix. • If the initial determination results in the individual being “required to file” based on other income, the full amount of Social Security is counted in the budget for the individual and the individual’s household. • Only Social Security benefits are subject to this rule of disregarding the benefit while determining if other earned and/or unearned income results in a requirement to file taxes. If “required to file,” count all income, including Social Security benefits received by the child or adult. Example #1 – Julie is 15. Her mother claims her as a tax dependent. Julie receives a Social Security benefit of $1,200 per month from her deceased father. She has no other income. Since Julie’s only income is Social Security, she is not “required to file” and her $1,200 Social Security benefit is not counted as income in her MAGI budget or in her mother’s budget. (Refer to 201.01.01, MAGI Income Rules, for policy on counting Social Security benefits of a child.) Example #2 – Same example as Example #1 but Julie starts to work part-time and earns $550 per month or $6,600 annually. Considering only Julie’s earnings, it is determined that Julie is now “required to file” because her earnings exceed the Earned Income Only limit of $6,300 in effect at the time. Julie’s wages of $550 per month and her Social Security of $1,200 are counted in her MAGI budget and in her mother’s budget.