Rev. Rul. 58-419

Advice has been requested concerning the attribution to a husband and wife of social security payments, for dependency or retirement income credit purposes, where such payments are received through one check made payable to them jointly.

Section 202(b) of Title II of the Social Security Act, as amended, 42 U.S.C. 402(b), provides for a wife's insurance benefit under certain conditions. Such benefits to the wife are usually received each month, along with the old-age insurance benefit of her husband through one check made payable to them jointly for the total amount of their respective monthly benefits. In this case, the payments were used by the husband and wife for their support. Since a son also contributed toward their support, he inquires as to the attribution to each parent of the benefits received by them through one joint check for the purpose of determining whether he furnished over half of the support of each parent for the year involved.

Section 202(b) of Title II of the Social Security Act, as amended, supra , provides in part, as follows:

(b) WIFE'S INSURANCE BENEFITS.

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(2) Except as provided in subsection (q) of this section, such wife's insurance benefit for each month shall be equal to one-half of the old-age insurance benefit of her husband for each month.

Whether the amount the wife is entitled to receive is obtained in a separate check or whether it is combined in one joint check with the amount due to be received by the husband does not affect her right to receive the amount as determined by section 202(b) of the Social Security Act. This is also true as to the amount to be received by the husband.

Under section 152 of the Internal Revenue Code of 1954, a taxpayer may claim a qualified individual as a dependent provided that he furnished over half of the support of such individual for the year involved. In computing the amount which is contributed for the support of the individual, there must be included any amount which is contributed by such individual for his own support, including amounts which are ordinarily excludable from gross income such as social security payments. In the instant case, where the wife's insurance benefit and the old-age insurance benefit of her husband were received by them through one check made payable to them jointly, the attribution of such payments as determined above must be taken into consideration in determining the amount of support furnished to each of them for purposes of determining whether such person qualifies as a dependent under section 152.

Under section 37 of the Code, a taxpayer may receive an income tax credit on any qualified retirement income received by him. The retirement income on which this credit is allowed is limited to $1,200. However, under section 37(d)(1) amounts received as a pension or annuity under title II of the Social Security Act must reduce the $1,200 limitation. Where a husband and wife receive monthly social security payments through one check made payable to them jointly for the total amount of their respective monthly benefits, the attribution of such payments as determined above must be taken into consideration in determining the amount required to reduce the $1,200 limitation for each of them in the event they receive retirement income.

Accordingly, it is held that where a wife's insurance benefit and the old-age insurance benefit of her husband are received by them monthly through one check made payable to them jointly, for the total amount of their respective monthly benefits, and such payments are used for their support, the separate amount attributable to each under section 202(b)(2) of the Social Security Act must be taken into consideration in determining the amount of support furnished to each of them for purposes of determining whether such person qualifies as a dependent under section 152 of the Code.

This rule is also applicable for the purpose of computing the retirement income credit, under section 37 of the Code, of taxpayers receiving retirement income.