You may be entitled to some tax breaks if you are disabled and qualify. We’ve complied some of the highlights and answers to common questions below. This data is directly from the IRS, and you can go to the website for more disabled taxpayer information.
Tax Breaks For The Disabled
Taxpayers with disabilities and parents of children with disabilities may qualify for a number of IRS tax credits and benefits. Listed below are seven types of tax credits and other tax break benefits that are available if you or someone else listed on your federal tax return is disabled.
Standard Deduction: Taxpayers who are legally blind may be entitled to a higher standard deduction on their tax return.
- Gross Income: Certain disability-related payments, Veterans Administration disability benefits, and Supplemental Security Income are excluded from gross income.
- Impairment-Related Work Expenses: Employees who have a physical or mental disability limiting their employment may be able to claim business expenses in connection with their workplace. These expenses must be necessary for the taxpayer to work, and can qualify an individual for a tax break.
- Credit for the Elderly or Disabled: This credit is generally available to certain taxpayers who are 65 and older, as well as to certain disabled taxpayers who are younger than 65 and are retired on permanent and total disability.
- Medical Expenses: If you itemize your deductions using Form 1040, Schedule A, you may be able to deduct medical expenses (see IRS Publication 502, Medical and Dental Expenses).
- Earned Income Tax Credit: EITC is available to disabled taxpayers and to the parents of a child with a disability. If you retired on disability, then any taxable benefits you receive under your employer’s disability retirement plan are considered earned income until you reach minimum retirement age. The EITC is a tax credit that not only reduces a taxpayer’s tax liability, but may also result in a refund. Many working individuals with a disability who have no qualifying children, but are older than 25 and younger than 65, qualify for EITC. Additionally, if the taxpayer’s child is disabled, the age limitation for the EITC is waived. The 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 benefit programs such as Supplemental Security Income and Medicaid.
- Child or Dependent Care Credit: Taxpayers who pay someone to care for their dependent or spouse so they can work, or look for work, may be entitled to claim this credit. There is no age limit if the taxpayer’s spouse or dependent is unable to care for themselves.
Find Out What Qualifies You for Tax Breaks
For more information on tax credits and benefits available to disabled taxpayers, see Publication 3966, Living and Working with Disabilities or Publication 907, Tax Highlights for Persons with Disabilities, available on the IRS website or by calling 800-TAX-FORM (800-829-3676).