The Internal Revenue Service has tax tips for taxpayers with disabilities or parents of children with disabilities. Below are seven tax credits or benefits that are available if someone on your federal tax return has a disability.
1. Standard deduction
Taxpayers who are legally blind may be entitled to a higher standard deduction on their tax return.
2. Gross income
Certain disability-related payments, Veterans Administration disability benefits and Supplemental Security Income are excluded from gross income.
3. 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, if the expenses are necessary for the taxpayer to work.
4. Credit for the elderly or disabled
Generally, this credit is available to certain taxpayers who are 65 and older or to certain taxpayers with disabilities who are younger than 65 and are retired on permanent and total disability.
5. Medical expenses
Taxpayers who itemize deductions using Form 1040, Schedule A may be able to deduct medical expenses. For more information, see IRS Publication 502, Medical and Dental Expenses.
6. Earned Income Tax Credit
The Earned Income Tax Credit is available to taxpayers with disabilities, as well as to parents of children with disabilities. If you retired on disability, 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 workers with a disability who have no qualifying children and are older than 25 but younger than 65 do qualify for EITC.
7. Child or dependent care credit
Taxpayers who pay someone to come to their home and care for a dependent or spouse may be entitled to claim this credit. There is no age limit if a taxpayer’s spouse or dependent is unable to care for himself or herself.