The parents of children with disabilities may qualify for IRS tax credits and benefits. Listed below are seven tax credits and other benefits that may be available if someone 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 may be 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. The expenses must be necessary for the taxpayer to work.
- 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 The EITC is a tax credit that not only reduces a taxpayer's tax liability but may also result in a refund. If a taxpayer's child is disabled, the age limitation for the EITC is waived. Any refund you receive because of the EITC will not be considered income when determining whether you are eligible for benefit programs such as Medicaid.
- Child or Dependent Care Credit Taxpayers who pay someone to care for their dependent child so they can work or look for work may be entitled to claim this credit. There is no age limit if the taxpayer's dependent is unable to care for themselves.
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 at http://www.irs.gov or by calling 800-TAX-FORM (800-829-3676).