Hello,
Okay, here is the situation. I have a step daughter (Missy) who is 20 years old and permanently disabled. Her father died when she was young, and both her and her mother (my wife) received SS survivor benefits until we got married. Missy was 13 at the time. Missy continued to receive those benefits until her 18th birthday Nov. 2015
In 2017 we applied, and got her approved for adult SSDI benefits under her survivor benefits since she was born with the disability.
Missy received $28,000 net benefits in 2017, which included $7,000 in back pay for 2016.
We claimed Missy as a dependent in 2016 since she received no benefits, nor had any income that year.
My questions are. Do we still claim her as a dependent or do we file a separate return for her? Are her benefits taxable? Do we have to file a revised return for 2016 since she received the back pay?
Thank you for taking the time to read and respond.