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Only Social Security survivors' and disability benefits received by minors can be taxable. If your child receives Supplemental Security Income, the full amount of the benefits is exempt from tax, and neither you nor your child must include them on your income tax return.
When SDI benefits are received as a substitute for UI benefits, the SDI is taxable by the federal government but is not taxable by the State of California. You will only get a Form 1099-G if all or part of your SDI benefits are taxable. Social security benefits are not taxable by the State of California. 2  Social security benefits may be taxable by the federal government. 3  Railroad sick pay is also not taxable by the State of California. 4  It is taxable by the federal government unless it is a payment for an on the-job-injury.