The 2024 tax season is coming to an end, or at least, the so-called “Tax Day” date, which is this April 15, the last business day to file your tax return. If you’re a Supplemental Security Income (SSI) recipient, you’re not necessarily required to file taxes, but it might be a good idea to do so anyway.
Even if your SSI benefits are not taxable, and the Internal Revenue Service (IRS) does not require it, and the money you receive is not considered earned income, there are reasons to consider filing your taxes. Keep reading and find out what the advantages of doing so are.
SSI Recipient? You Might Want to File Your Taxes This Year
For starters, there are economically positive advantages to your budget. For example, child tax credits (CTC) and earned income tax credits (EITC), which could result in a tax refund and more money for you.
The child tax credit (CTC) is a tax benefit for households that have dependent children. It is a non-refundable credit, which reduces the amount of taxes they have to pay. In certain cases, you can even get a refund if the CTC exceeds the amount of tax you have to pay.
To qualify for a CTC if you receive SSI, you must meet the following general requirements:
- Be a U.S. citizen or legal resident.
- Have a dependent child of 17 years or under, at the end of the tax year: the minor in question may be a son, daughter, stepson, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or descendant of one of these (e.g., a grandson, niece, or nephew
- Your child must have a valid Social Security number.
- Your child from living with you for more than half of the year.
- You can’t be someone else’s dependent.
- Your income cannot exceed certain limits.
The income limits for the CTC are different in each case, depending on your marital status and the number of children you have: The final eligibility of each individual is determined by the Internal Revenue Service (IRS), and you can find out using the official online tool on its website.
You can claim your child tax credit by entering your children and other minor dependents on Form 1040, U.S. Individual Income Tax Return, and attaching a completed Schedule 8812, Credits for Qualifying Children and Other Dependents.
EITC Credits for SSI Recipients: Who Qualifies?
To qualify for the Earned Income Tax Credit (EITC) as a beneficiary of Supplemental Security Income (SSI), it is necessary to meet two sets of requirements:
- Have earned income: It is required to have worked and earned income during the tax year. The IRS defines “earned income” as wages, tips, self-employment income and other earned income. SSI benefits are not considered earned income for the EITC.
- Meet Income limits: Total income must be less than certain limits set by the IRS. These limits vary depending on your marital status and the number of children you have. You can check the specific income limits for the 2023 tax year on the IRS website: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc
- It is mandatory to be a U.S. citizen or resident for the entire fiscal year.
Have a valid Social Security Number: You and your dependent children must have valid Social Security numbers. - A federal income tax return must be filed, even if no taxes are owed.
Additional requirements for those individuals receiving SSI:
- It is not possible to be dependent on someone else for the EITC.
- Having a qualifying child is required in order to claim the EITC. This can be an own child, an adopted child or a grandchild. The child must be under the age of 19 at the end of the tax year or a dependent student under the age of 24.
Are My Social Security Benefits Taxable?
To determine if the Social Security benefits you receive are taxable, you have to consider a list of factors. First, it is analyzed if the sum of half of your Social Security benefits plus other income exceeds certain limits depending on your marital status and family situation. These limits vary depending on whether you are single, head of household, married and how you file your taxes.
If your total income exceeds these limits, you may have to pay taxes on a portion of your Social Security benefits. It is important to understand that not all income is considered for this calculation; some types of income are excluded such as inheritance income or royalties, for example.
Another aspect to consider is your age and that of your spouse if you are married. If you are over the age of 65 and your income exceeds certain thresholds, you may need to file a tax return and possibly pay taxes on part of your Social Security benefits.
The way you file your tax return also influences how your Social Security benefits are taxed. For example, if you file a joint return with your spouse, both your income and your spouse’s income are considered to determine the taxation of Social Security benefits.