My youngest child, Joshua the Mercenary, gets SSD funds and they get put away into a college fund. It never occurred to me to ask or look up, but are these funds tax free to him? Now and later?
Dick
- posted
15 years ago
SSD Payments to dependents
Loading thread data ...
- Vote on answer
- posted
15 years ago
Social security benefits are taxable to a child in the same manner they would be taxable to an adult. Half the benefit plus his other income including tax-exempt interest would have to exceed $25K before any amount of his SSD would be taxed.
You state that the benefits are going into a college fund but you didn't say whether this "fund" is a tax deferral account (QTP and/or CESA) or just an investment account that is going to be used for his higher education. The QTP & CESA grow tax-free and distributions are tax-free if used for higher education qualifed expenses.