SSD Payments to dependents

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.