Disabilities

Living and Working with Disabilities

This information is intended to provide a basic understanding about existing tax credits and benefits that may be available to qualifying taxpayers with disabilities and parents of children with disabilities.  More detailed information can be found in IRS Publication 807, Tax Highlights for Persons with Disabilities, and in the other publications cited below.

AS A PERSON WITH A DISABILITY

You may qualify for some of the following tax deductions, income exclusions, and credits.  More detailed information may be found in the IRS publications referenced.

Standard Deduction

If you are legally blind, you may be entitled to a higher standard deduction on your tax return.

See IRS Publication 501

Gross Income

Certain disability-related payments may be excluded from gross income.  Veterans Administration (VA) disability benefits and Supplemental Security Income (SSI) may also be excluded from your gross income.

See IRS Publication 525

Impairment-Related Work Expenses

If you are an employee and have a physical or mental disability that functionally limits your employment, you may be able to claim business expenses for attendant care at your workplace and other expenses in connection with your workplace that are necessary for you to work.

See IRS Publication 529

Credit for the Elderly or Disabled

You may be able to claim this credit if you are 65 or older or if you are under 65 and you retired on permanent and total disability.

See IRS Publication 524

Medical Expenses

These are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.  They include the costs of equipment, supplies, and diagnostic devices needed for these purposes.  They also include dental expenses.

See IRS Publication 502

Earned Income Tax Credit (EITC)

This is the tax credit for certain people who work and have low earned income.  A tax credit usually means more money in your pocket.  It reduces the amount of tax you owe.  The EITC may also give you a refund.

Many working individuals with a disability that have no qualifying children, who are at least 25 years of age but under 65 years of age, qualify for EITC.

Earnings for EITC purposes can include disability benefits you receive from your employer's disability retirement plan, until you reach minimum retirement age.

EITC has no effect on certain public benefits.  Any refund you receive because of the EITC will not be considered income when determining whether you are eligible for the following benefit programs, or how much you can receive from these programs.  However, if the amounts you receive are not spent within a certain period of time, they may count as an asset (or resource) and affect your eligibility.

• Medicaid and Supplementary Security Income (SSI).
• Food stamps.
• Low-income housing.

Tempoary assistance for needly families (TANF) benefits may be affected.  Please check with your state.

See IRS Publication 596

AS A PARENT OF A CHILD WITH A DISABILITY

You may qualify for some of the following tax exemptions, deductions and credits.  More detailed information may be found in the IRS publications referenced.

Dependents

You may be able to claim you child as a dependent regardless of age if they are permanently and totally disabled.

Permanently and totally disabled:

• He or she cannot engage in any substantial gainful activity because of a physical or mental condition.
• A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death.

Dependent with a Disability Working at Sheltered Workshop

You may be able to claim a dependency exemption for a qualifying child or qualifying relative.  Gross income does not include income from services the individual peforms at a sheltered workshop; however they must still meet the other dependency tests.

See IRS Publication 501

Adoption Credit

You may be able to claim an adoption credit and exclude employer-provided adoption benefits from your income if you adopt a child with special needs.

See IRS Publication 907

EITC for Parents of Children with Disabilities

You may qualify for this credit if your qualifying child is permanently and totally disabled, regardless of age, as long as you meet the other requirements.

See IRS Publication 596

Child or Dependent Care Credit

You may be entitled to this credit if you pay someone to come to your home and care from your dependent or spouse regardless of their age if they are unable to care for themselves.  Persons who cannot dress, clean, or feed themselves are considered not able to care for themselves.  Also, persons who must have constant attention to prevent them from injuring themselves or others are considered not able to care for themselves.

See IRS Publication 503

Medical Conferences

You can include in medical expense amounts paid for admission and transportation to a medical conference if the medical conference concerns the chronic illness of yourself, your spouse, or your dependent.

See IRS Publication 502