Tax Credits and Deductions for People with Disabilities

With tax day just around the corner, now is the time for taxpayers with disabilities and taxpayers with children or spouses with disabilities to determine which Internal Revenue Service (IRS) tax credits and benefits they are eligible for.

"There are 54 million Americans with disabilities, so these tax credits and benefits apply to about 20 percent of our population," said Jana Burke, the director of the DBTAC Rocky Mountain ADA Center which provides information, training and informal guidance to individuals and organizations with rights and responsibilities under the Americans with Disabilities Act (ADA).

"The IRS provides people with disabilities and people with children or spouses with disabilities with a variety of tax credits and benefits, but too often taxpayers aren't familiar with the tax credits they are eligible for and miss out on this federal assistance."

Main Content

Tips for taxpayers with disabilities and dependents or children with disabilities:

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. Child or Dependent Care Credit:

Taxpayers who pay someone to care for their dependent under the age of 13 or spouse who is not able to care for himself or herself, may be entitled to get a credit of up to 35 percent of their expenses.

4. 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.

5. 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 you take a business deduction for these impairment-related work expenses, they are not subject to the 7.5 percent limit that applies to medical expenses. The expenses must be necessary for the taxpayer to work.

6. Medical Expenses:

If you itemize your deductions using Form 1040, Schedule A, you may be able to deduct medical expenses. When figuring your deduction for medical expenses, you can generally include medical and dental expenses you pay for yourself, your spouse, and your dependents.

7. Earned Income Tax Credit (EITC):

The EITC is a tax credit for certain people who work and have low earned income. It is available to taxpayers with disabilities as well as to the parents of a child with a disability. The EITC not only reduces a taxpayer's tax liability but may also result in 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.

DBTAC Rocky Mountain ADA Center

The DBTAC Rocky Mountain ADA Center provides information on the ADA to individuals and organizations in Colorado, Montana, North Dakota, South Dakota, Utah and Wyoming. The Center is one of 10 regional centers funded by the National Institute on Disability and Rehabilitation Research, a division of the U.S. Department of Education. The Center can guide taxpayers as they seek to understand their eligibility for these various tax credits, benefits and incentives.

Insights, Analysis, and Developments

Attribution/Source(s): This quality-reviewed publication was selected for publishing by the editors of Disabled World (DW) due to its relevance to the disability community. Originally authored by DBTAC Rocky Mountain Center and published on 2011/03/08, this content may have been edited for style, clarity, or brevity.