| Tax Benefits for Disabled Taxpayers
IRS Tax Tip 2/3/11
Taxpayers with disabilities and parents of children with disabilities may
qualify for a number of IRS tax credits and benefits. Listed below are seven
tax credits and other benefits which are available if you or someone else
listed on your federal tax return is disabled.
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. The expenses must be necessary
for the taxpayer to work.
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. 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.
6. Earned Income Tax Credit EITC is available to disabled taxpayers as
well as to the parents of a child with a disability. 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 working individuals with
a disability who have no qualifying children, but are older than 25 and
younger than 65 do -- in fact -- 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.
7. 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.
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