When Social Security Survivor Benefits Are Taxable

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You probably know that Social Security is a significant source of retirement income, but you may know little about Social Security survivor benefits. According to Social Security, the value of the survivor benefits you may qualify for upon the death of a spouse or parent is higher than the value of your individual life insurance, if you have a policy. But any time you get paid, taxes become a concern. Are Social Security benefits taxable? The answer is—like always—it depends. First, let’s look at the two types of Social Security survivor benefits.

Widow or Widower

If a spouse passes away, the surviving spouse may receive full benefits once they reach their full retirement age or reduced benefits as early as age 60. If the spouse is disabled, benefits begin as early as age 50.

They can also get benefits at any age if they take care of a child who is younger than age 16 or disabled, who receives Social Security benefits. The surviving spouse also receives a one-time death benefit of $255 regardless of their age. They have two years to claim the benefit.

The amount of benefit gets complicated. If neither spouse has claimed benefits, and the surviving spouse works, they will receive theirs or the deceased spouse's—generally whichever is larger. If one was claiming benefits and one was not, the surviving spouse will need help figuring out how to maximize their benefits.

Surviving divorced spouses generally qualify for benefits providing the marriage lasted at least 10 years and they are not remarried before the age of 60. Other rules apply that may disqualify the divorced spouse from receiving benefits.

How Widow or Widower Benefits Are Taxed

The tax treatment is much the same as if the person was paying based on their own years of services. Up to 85% of the benefits received might be taxable but that depends on a lot of factors. Most notable is the income test.

If the person has any additional income but it’s below $25,000, benefits won’t be taxed. If they earn between $25,000 and $34,000, 50% of the survivor benefit is taxable. For anything above $34,000, 85% is taxable. For joint returns, the thresholds are $32,000–$44,000, and $44,000 and above.

Unmarried Children

According to Social Security, 98 of every 100 children could get benefits. If the deceased parent’s child is under the age of 18, or 19 if they’re attending elementary or secondary school full time, they qualify for survivor benefits.

They can also receive benefits at any age if they were disabled before the age of 22 and remain disabled. Stepchildren, grandchildren, step-grandchildren, or adopted children may also qualify for benefits. Eligible children can receive up to 75% of the deceased parent’s basic benefit.

How They’re Taxed

Survivor benefits to children are taxable under certain circumstances but in most cases, children will not pay taxes. If the survivor benefits are the only income the child earns, they won’t pay any taxes on the benefits.

If the child earns income through a job or other means, some calculating has to take place. Add half the child’s benefits for the year to any other income they received. If that amount is enough to meet the filing requirement, the income becomes taxable. For children, that number is $25,000 as of 2020.

Parental Tax Obligations

If you are the surviving spouse and your child receives survivor benefits, that money is for them and has no bearing on your taxes. You do not pay taxes for the child’s earnings and no part of your Social Security status will have an effect on their ability to collect benefits if they are eligible.

Maximum Family Earnings

If the family earnings are more than 150% to 180% of the deceased parent’s earnings, Social Security will reduce the benefits proportionally for everybody except the surviving parent until the total reaches the total maximum amount.

Survivor Benefits Are Complicated

Survivor benefits are complicated. In most cases, you will have to go to a Social Security office to figure out if you or the child is eligible and how much the benefits will be. Especially if you’re working and under full retirement age, get some help so you don’t miss out on benefits that are rightfully yours.

Frequently Asked Questions (FAQs)

What can you spend Social Security survivor benefits on?

Adults who receive survivor benefits for themselves are not required to account for their expenses—the money is theirs to use for their daily needs. However, if you receive benefits on behalf of a child survivor or someone else who can't manage their own money, you'll need to ensure it is used properly. The Social Security Administration requires that the money be spent first for the beneficiary's food, shelter, and medical needs. Any surplus must be saved in a federally insured, interest-bearing savings account or bond. You'll need to account for how you use the money by filling out a Representative Payee Report once a year.

How are Social Security survivor benefits calculated?

Survivor benefits are based on the deceased person's income, along with the age of the beneficiary and their relationship to the deceased. Generally, benefits are calculated as follows:

  • Widow or widower, at full retirement age or older: 100% of the deceased person's basic benefit amount
  • Widow or widower, age 60 or older, but under full retirement age: 71%–99% of the deceased person's basic benefit amount
  • Widow or widower, any age, with a child younger than age 16: 75% of the deceased person's benefit amount
  • Child: 75% of the deceased person's benefit amount

Additionally, a family's total benefit is capped between 150% and 180% of the deceased person's benefit amount.

How long does it take to get survivor benefits from Social Security?

Social Security generally takes about 30-60 days to start paying benefits after it approves your application. You can check the status of your application at the Social Security Administration's website.

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  2. U.S. Social Security Administration. "Survivors Benefits," Page 2. Accessed April 30, 2020.

  3. U.S. Social Security Administration. "Survivors Benefits," Page 3. Accessed April 30, 2020.

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  7. Internal Revenue Service. "Publication 915 (2019) Social Security and Equivalent Railroad Retirement Benefits," Page 3. Accessed April 30, 2020.

  8. U.S. Social Security Administration. "Benefits Planner: Income Taxes and Your Social Security Benefit." Accessed April 30, 2020.

  9. U.S. Social Security Administration. "Parents and Guardians." Accessed April 30, 2020.

  10. U.S. Social Security Administration. "Benefits for Children," Pages 1-2. Accessed April 30, 2020.

  11. Internal Revenue Service. "Survivors' Benefits - Are Social Security Survivor Benefits for Children Considered Taxable Income?" Accessed April 30, 2020.

  12. Internal Revenue Service. "Publication 915 (2019) Social Security and Equivalent Railroad Retirement Benefits," Page 5. Accessed April 30, 2020.

  13. U.S. Social Security Administration. "Survivors Benefit Amount." Accessed April 30, 2020.

  14. Social Security Administration. "A Guide for Representative Payees." Accessed April 30, 2020.

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