GeoffreyG
New Member

State tax filing

As SuperUser @xmasbaby0 correctly notes, there isn't actually a special tax credit for the disabled on a federal tax return, although a reasonable person would think that there might, or should, be.  That isn't a TurboTax decision; it's just a matter of federal tax law.

Since your original question has gone unanswered for over a week, we'll make an effort to explain this area of the tax code in some detail, and in doing so tie up this question thread.

Certainly, you can include, toward your itemized deductions, any out-of-pocket medical expenses that may be a result of your disability, subject to the usual limits (i.e., medical expenses only "count" if they exceed 10% of your Adjusted Gross Income).  Even then, you can only itemize deductions if your total deductions exceed the standard deduction for your filing status (i.e., Married Filing Jointly, Single, etc.).

This is why you won't see a general question on the federal side of the TurboTax program relating to a permanent and total disability.  The answer simply won't matter for federal tax purposes, as there is no federal tax credit, or additional exemption, for it (although in a notable exception there is a tax benefit(s) for those who are legally blind).

However, if you happen to live in a state where there in an income tax, then the answer to the above may be modified, as some states do indeed have a special tax benefit in their tax laws for the disabled.

For example, the state of Oregon, for instance, offers an additional state-level personal exemption for those who are totally and permanently disabled and have the medical records to prove it.  As such, in the Oregon module of the TurboTax program, you will actually see a question that asks specifically about permanent disability.  There are other similar examples from some other states as well.

For instance, if you are a Kentucky resident, and you are receiving pension disability retirement income, some (or all) of that pension income can be excluded from state taxation, because of the fact that the recipient is totally and permanently disabled.  Once again, that is a state-level question and would appear as a question in the state module (not federal).

In either of those cases, you would need to look to specific state tax rules in order to see if your condition qualifies for the state tax benefit..  Hopefully this detailed answer helps to clarify things.

Thank you for asking this thoughtful question, and we wish you the best of luck going forward.

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