The Taxes on a Child's Social Security From a Deceased Parent

If all she gets paid is survivor benefits, she doesn't pay tax.

If all she gets paid is survivor benefits, she doesn't pay tax.

Social Security does more than pay for retirement. About 98 percent of children can receive survivor benefits if the parental breadwinner in their family dies. Like disability and retirement, the benefits can become partially taxable. Most kids are unlikely to owe the IRS anything, though, no matter how much the Social Security Administration pays them.

Survivor Benefits

Survivor benefits work like retirement benefits. The more someone works and the more she earns, the more retirement benefits she accumulates. If she dies, her spouse and children then receive a percentage of those benefits. A child under 18 -- 19 if he's still in high school -- or a child who is disabled can qualify for up to 75 percent of their dead parent's retirement benefits. The surviving parent can also claim 75 percent if he's caring for a child under 16.

Tax Formula

When figuring out if your kid's benefits are taxable, don't worry about the total family benefits. If, say, you and two kids all receive survivor benefits, you test each child for taxability separately. Take half the child's survivor benefits, add his adjusted gross income and any nontaxable interest he gets. As of 2013, if the total tops $25,000, half his benefits are taxable; above $34,000, 85 percent are taxable. Even if the government pays you all the money, you have to separate out individual benefits before figuring tax.

Reporting Benefits

Every January the SSA sends out 1099 forms telling people receiving benefits how much they made during the year. You can use that, plus W-2s and any other paperwork, to figure out if any of your children's benefits are taxable. If they are, the IRS treats them like any other taxable income. Your child, or you, reports taxable and nontaxable benefits on her 1040 form. If any benefits are taxable, she can't use a 1040EZ.


If you have a child getting survivor benefits and you think he's probably going to owe tax, there are alternatives to writing out a big check at tax time. One is to ask the SSA to withhold taxes from his benefits. The agency can withhold 7, 10, 15 or 25 percent of monthly benefits, but no other rates. The other alternative is to pay estimated taxes on the benefits and other income at regular intervals throughout the year.


About the Author

A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.

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