Message Font: Serif | Sans-Serif
No. of Recommendations: 0
After a 10+ year battle with Social Security, including escalating appeals, my husband was approved for disability benefits. In addition, our minor son (age 11) also receives a dependent benefit.

As the battle waged on for more than a decade, my son received a substantial lump-sum payment. I am using TurboTax to complete our tax returns. According to the software, my son's return must be filed separately, as gross income (earned and unearned) is in excess of $1,250, and we do not qualify to file form 8814 to include his income on our return.

I then checked the IRS website, specifically Publication 501. As one-half of the amount reported on the SSA-1099 exceeds $25,000, it would appear that he must file an independent return.

My concern is that nearly 90% of the amount listed on the 1099 is for prior tax years; should I only look at the amount that represents 2011 SSDI income when determining whether a return should be filed in his name? Besides the SSDI, he has minimal interest and dividend income from child savings accounts.

I did run through the data entry in TurboTax, noting the amounts received as attributed to previous tax years, and find that there is no tax liability for him. If I do end up filing a federal return, with a zero tax liability, should I also file a state return (we are in New Jersey) with zero liability as well?

Any advice from those "in the know" is greatly appreciated.

Thanks in advance,

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.