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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.
1 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.he following are exceptions: 1  Social security benefits are not taxable by the State of California. 2  Railroad sick pay is also not taxable by the State of California. 3  A disabled taxpayer who receives SDI as a substitute for unemployment benefits is considered to be receiving unemployment insurance (UI) compensation.