turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Do I qualify for the permanent disability tax credit?

I filed for disability in June of 2016 and am currently still in determination stage. I do have a disability that kept me from working the whole year of 2016, but do I qualify for the tax credit?
Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Best answer

Accepted Solutions
GeoffreyG
New Member

Do I qualify for the permanent disability tax credit?

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.

View solution in original post

10 Replies

Do I qualify for the permanent disability tax credit?

Is that a state credit?  There is not a Federal disability credit.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
chefrod1
New Member

Do I qualify for the permanent disability tax credit?

I have been disabled since 2015. do I quallify for disability benifits
chefrod1
New Member

Do I qualify for the permanent disability tax credit?

I didnt see thw disabled creadit on state disablility?

Do I qualify for the permanent disability tax credit?

Thank you for reaching out @chefrod1. Please check the following links for information about your question:
<a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tips/disability/what-are-disability-tax-credits/L7HH8FNLG">https://t...>
<a rel="nofollow" target="_blank" href="https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/disability-and-earned-in...>
GeoffreyG
New Member

Do I qualify for the permanent disability tax credit?

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.

Do I qualify for the permanent disability tax credit?

How much is the exemption ?  and again is it applicable for STANDARD DEDUCTION?

 

Do I qualify for the permanent disability tax credit?

@BUBBALA You have posted to a very old thread that has outdated information.   There have not been any personal exemptions on a federal tax return since tax year 2017.   For 2018 and beyond the standard deduction increased instead.   State tax laws vary, so there may be an "exemption" on your state return.

 

2021 STANDARD DEDUCTION AMOUNTS

 

SINGLE $12,550  (65 or older + $1700)

 

MARRIED FILING SEPARATELY $12,550  (65 or older + $1350)

 

MARRIED FILING JOINTLY $25,100  (65 or older + $1350 per spouse)

 

HEAD OF HOUSEHOLD  $18,800  (65 or older +$1700)

 

Legally Blind + $1350

 

 

 

Your standard deduction lowers your taxable income.  It is not a refund.  You will see your standard or itemized deduction amount on line 12a of your 2021 Form 1040.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Hal_Al
Level 15

Do I qualify for the permanent disability tax credit?

 

Q. How much is the disability credit/deduction/exemption?  and again is it applicable for standard deduction?

A.  The Federal Credit (not a deduction or exemption) for the Elderly or Disabled is 15% of your Modified Adjusted Gross Income*, but not more than your calculated tax.  Since it is a credit, you get it even if you use the standard deduction. 

 

Q. (Original question) Do I qualify for the permanent disability tax credit?

A.  There is a credit for the elderly or disabled (you don't have to be both). But because it has not been adjusted for inflation since 1983, very very few people qualify. If you qualify, TurboTax (TT) will automatically calculate it. It goes on Schedule 3, line 6d (2021). It is not a refundable credit. That is, you must have a tax liability to offset to get the credit. Very few people, with that little income have an actual tax to offset. 

 Having any social security income works against you. Essentially your potential credit is reduced by any tax you "shoulda paid” on the untaxed Social security income. If you have more than $5000 social security ($7500 Married Filing Jointly and both are elderly or disabled), or VA benefits, you will not qualify for the credit.

If you think you qualify, and TT missed it, In TurboTax (TT), enter at:

Federal Taxes Tab

Deductions & Credits

-Scroll down to:

--Other deductions & Credits

  -Elderly or Disabled credit

A simplified  rule of thumb is:  if you have earned a  social security benefit, including SSDI, you won't qualify for the Credit for the Elderly and Disabled.

 

* See schedule R for calculation of the credit and Modified Adjusted Gross Income (it's complicated).

 https://www.irs.gov/pub/irs-pdf/f1040.pdf

mari2013
New Member

Do I qualify for the permanent disability tax credit?

hello i’m on disability and i was wondering if i can get the disability tax credit for the state of indiana

Hal_Al
Level 15

Do I qualify for the permanent disability tax credit?

You're tagging on to an old thread, which reduces the chances of somebody familiar with IN seeing it. You may want to ask a fresh question. 

 

That said, Anthing you may qualify for will come up in the Indiana state portion of the TurboTax interview. From the IN DOR web site:

  • Disability Retirement Deduction

    To qualify for this deduction you must have:

    • Been permanently and totally disabled at the time of your retirement;
    • Retired on disability before the end of the year; and
    • Received disability retirement income in the tax year.

    If you meet these requirements, view Schedule IT-2440.

     

     

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies