SSI + Savings Bond Interest

Q. , Does she need to file a return to account for the interest?

A.  No.

If she is your dependent, she does not need to file until she has $1250 of other income , other than SSI or SSDI. 

If she is not your  dependent, the limit is $13,850.

You do not report his/her income on your return*. If it has to be reported, at all, it goes on his own return. A dependent must file a tax return for 2023 if he had any of the following:

1.          Total income (wages, salaries, taxable scholarship etc.) of more than $12,950 (2022) ($13,850 2023).
2.          Unearned income (interest, dividends, capital gains, unemployment, taxable portion of 529 distribution) of more than $1150 (2022) ($1250 2023)
3.          Unearned income over $400 (2022) and gross income of more than $1150 (2022) $1250 (2023)
4.          Household employee income (e.g. baby sitting, lawn mowing) over $2300 ($12,950 if under age 18)
5.          Other self employment income over $432, including money on a form 1099-NEC

Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.

In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.

*If his only income is from interest and dividends, Alaska PFD or capital gains distributions shown on a 1099-DIV, there is a provision for entering it on your return, using form 8814.