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Gifts to an UTMA Account for the Child of an Social Security Beneficiary

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  • 02-12-2017, 12:47 PM
    as42dcwsdf2
    Gifts to an UTMA Account for the Child of an Social Security Beneficiary
    Hi All,

    I am the Representative Payee for my minor daughters SS benefits. My daughter receives benefits because my ex-wife is disabled.

    I have been contributing to a UGMA account for my daughter. Is there a limit to the amount of money that can be in this account ?

    The Rep Payee Handbook states:
    A special note about SSI beneficiaries
    To continue receiving SSI, a beneficiary must not have resources worth more than $2,000 ($3,000 for couples). We don’t count all resources, however, some items you buy could cause the beneficiary to lose their SSI benefits. Any money you don’t spend could also count as a resource. "

    Can someone help clarify.

    Thank you all for your assitance.
  • 02-12-2017, 02:00 PM
    llworking
    Re: Ss Benefits and Ugma Account
    Quote:

    Quoting as42dcwsdf2
    View Post
    Hi All,

    I am the Representative Payee for my minor daughters SS benefits. My daughter receives benefits because my ex-wife is disabled.

    I have been contributing to a UGMA account for my daughter. Is there a limit to the amount of money that can be in this account ?

    The Rep Payee Handbook states:
    A special note about SSI beneficiaries
    To continue receiving SSI, a beneficiary must not have resources worth more than $2,000 ($3,000 for couples). We don’t count all resources, however, some items you buy could cause the beneficiary to lose their SSI benefits. Any money you don’t spend could also count as a resource. "

    Can someone help clarify.

    Thank you all for your assitance.

    What you just quoted applies to SSI benefits being received by adults who are disabled and cannot qualify for SSDI, and for children who are themselves, disabled.

    That does not count for children who are receiving SSI because their parent is disabled. Those benefits simply replace child support and are not means tested.
  • 02-12-2017, 02:59 PM
    as42dcwsdf2
    Re: Ss Benefits and Ugma Account
    llworking,

    Thank you for the reply.

    I understand your answer to mean I am able to contribute an unlimited dollar amount into a UGMA for my child. Is that correct?

    Thank you for clarifying.
  • 02-12-2017, 03:34 PM
    llworking
    Re: Ss Benefits and Ugma Account
    Quote:

    Quoting as42dcwsdf2
    View Post
    llworking,

    Thank you for the reply.

    I understand your answer to mean I am able to contribute an unlimited dollar amount into a UGMA for my child. Is that correct?

    Thank you for clarifying.

    Yes, that is correct.
  • 02-12-2017, 11:39 PM
    Mercy&Grace
    Re: Ss Benefits and Ugma Account
    If a child is receiving benefits because a parent is disabled, the parent nor the child is receiving SSI..In some situations where the parent doesn't receive at least $755 a month in SSDI and they meet SSI financial criteria, they may also receive SSI to make up the difference so they receive a total of $755 a month in SSDI and,SSI. In these situations, if the child receives Dependents Benefits, it is very little. A child can't receive SSI unless they are disabled.
  • 02-13-2017, 01:08 AM
    llworking
    Re: Ss Benefits and Ugma Account
    Quote:

    Quoting Mercy&Grace
    View Post
    If a child is receiving benefits because a parent is disabled, the parent nor the child is receiving SSI..In some situations where the parent doesn't receive at least $755 a month in SSDI and they meet SSI financial criteria, they may also receive SSI to make up the difference so they receive a total of $755 a month in SSDI and,SSI. In these situations, if the child receives Dependents Benefits, it is very little. A child can't receive SSI unless they are disabled.

    Mercy, the child's benefits when a parent is receiving SSDI are called SSI. I have never understood why, but its just what they are called.
  • 02-13-2017, 10:38 AM
    Mercy&Grace
    Re: Ss Benefits and Ugma Account
    Quote:

    Quoting llworking
    View Post
    Mercy, the child's benefits when a parent is receiving SSDI are called SSI. I have never understood why, but its just what they are called.

    llworking, Thank You.
  • 02-14-2017, 08:18 AM
    as42dcwsdf2
    Re: Ss Benefits and Ugma Account
    Mercy, thank you for the question.
    llworking, thank you for the clarity. I undestand the following:
    My ex-wife worked for several years before becoming disabled. Therefore she is receiving SSDI.
    My child is receiving SSI.

    If I may segue...

    I believe that the benefits that I am receiving in my childs name are not taxable on my 1040. Is my understanding correct?

    Thanks again for all your help.
  • 02-14-2017, 11:19 AM
    Taxing Matters
    Re: Ss Benefits and Ugma Account
    Quote:

    Quoting as42dcwsdf2
    View Post
    Mercy, thank you for the question.
    llworking, thank you for the clarity. I undestand the following:
    My ex-wife worked for several years before becoming disabled. Therefore she is receiving SSDI.
    My child is receiving SSI.

    If I may segue...

    I believe that the benefits that I am receiving in my childs name are not taxable on my 1040. Is my understanding correct?

    Thanks again for all your help.

    They are the child’s benefits, not your benefits, and thus not includable on your tax return. Moreover, the SSI benefits the child is receiving is not taxable income to the child, either.
  • 02-14-2017, 11:43 AM
    as42dcwsdf2
    Re: Ss Benefits and Ugma Account
    Taxing Matters, thank you and if I may ask another question.

    My child received a SSA-1099. If the SSI benefits to the child are not taxable income then why would there be a 1099 issued?

    Regards
  • 02-14-2017, 04:02 PM
    Mercy&Grace
    Re: Ss Benefits and Ugma Account
    Quote:

    Quoting Taxing Matters
    View Post
    They are the child’s benefits, not your benefits, and thus not includable on your tax return. Moreover, the SSI benefits the child is receiving is not taxable income to the child, either.

    Taxing Matters, if the parent claims the child as a dependent wouldn't the total income be what decides if taxes have to be paid ?
  • 02-14-2017, 04:31 PM
    Taxing Matters
    Re: Ss Benefits and Ugma Account
    Quote:

    Quoting as42dcwsdf2
    View Post
    Taxing Matters, thank you and if I may ask another question.

    My child received a SSA-1099. If the SSI benefits to the child are not taxable income then why would there be a 1099 issued?

    Regards

    Assuming your daughter is unmarried, then the Social Security benefits will only be taxable if the total of (1) one-half her Social Security benefits plus (2) all her other income together exceed $25,000. So, unless she had some significant income aside from the Social Security, none of the Social Security is taxable. See IRS Publication 915 which explains all this.
  • 02-14-2017, 06:21 PM
    Mercy&Grace
    Re: Ss Benefits and Ugma Account
    If the child is married, the child wouldn't be eligible for benefits off of the parents record.
  • 02-15-2017, 04:01 AM
    llworking
    Re: Ss Benefits and Ugma Account
    Quote:

    Quoting Mercy&Grace
    View Post
    If the child is married, the child wouldn't be eligible for benefits off of the parents record.

    Mercy, the point is that the children's benefits are treated as the child's income for tax purposes, not the parent's income. Therefore, they would only be taxable to the child under the normal calculation to determine whether or not SS benefits are taxable. Taxing Matters was describing the normal calculation for a single person.
  • 02-15-2017, 01:50 PM
    Mercy&Grace
    Re: Ss Benefits and Ugma Account
    llworking, I was thinking about people that may read this thread in the future. I didn't want them to think a "child" that was married could receive these benefits. I apologize for any confusion
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