Is the $255 Social Security Death Benefit Taxable?
Get clear guidance on the $255 Social Security lump-sum death payment, including its tax-free status, strict claimant eligibility, and how to receive it.
The Social Security Administration provides a one-time, lump-sum death payment of $255 to assist with expenses after a person’s passing. This payment is distinct from ongoing survivor benefits. Understanding the tax implications, who is eligible, and how to receive this payment is important for those managing a deceased loved one’s affairs.
Tax Treatment of the $255 Death Benefit
The $255 lump-sum death payment is not subject to federal income tax. The recipient does not need to report it on their annual federal income tax return, and it will not be included in their gross income or increase their tax liability.
The payment is not reported on Form SSA-1099, the form used to report other Social Security benefits that may be taxable. While the benefit is not taxed federally, state tax laws can vary. Most states do not tax this benefit, but it is best to confirm the rules for your specific state.
Who Qualifies for the Payment
Eligibility for the $255 death payment follows a strict priority order set by the Social Security Administration (SSA). The primary beneficiary is the surviving spouse, who must have been living in the same household as the deceased worker at the time of death. A spouse living apart may still be eligible if they were already receiving certain Social Security benefits on the deceased’s record, or if they became eligible for survivor benefits upon the worker’s death. If there is no eligible surviving spouse, the payment can be made to a surviving child who was eligible for Social Security benefits on the deceased’s record in the month of death.
The Process for Receiving the Payment
The method for receiving the $255 payment depends on the beneficiary’s status with the Social Security Administration. For a surviving spouse already receiving spousal benefits on the deceased’s record, the payment is made automatically. No application is necessary in this scenario.
For an eligible spouse or child not already receiving benefits, an application is required. The survivor must notify the SSA of the death and file Form SSA-8. The application must be filed within two years of the date of the worker’s death. To begin this process, contact the SSA by phone or by visiting a local office.