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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.
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.
How much is the exemption ? and again is it applicable for STANDARD DEDUCTION?
@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.
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).
hello i’m on disability and i was wondering if i can get the disability tax credit for the state of indiana
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:
To qualify for this deduction you must have:
If you meet these requirements, view Schedule IT-2440.
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