Disabled spouse

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.

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 offers an additional state-level personal exemption for those who are totally and permanently disabled and have the 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 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 order to research this further, you would want to check your own state's tax instructions, or their tax preparation booklet, and perform a search for the word "disability."  Additionally, where applicable, the TurboTax state module will ask you relevant questions about disability (including disability of a spouse) as well.

I found Schedule R that is titled "Credit for the Elderly or the Disabled" so yes, there is a credit.

Unfortunately, in your case the answer is probably "no."  In order to qualify for any credit, your wife must have had some sort of taxable disability income.  The Turbo Tax program will automatically fill in Schedule R for you and compute your credit (if any).

My daughter is a public-school teacher (18-years) with 2 young children and she’s married. Her husband has a student loan. Her husband is also totally disabled and pending an SSA disability, but they have a physician and medical specialist who states that her husband can no longer work.

He suffers from Grand Mal Seizures and his medication does not prevent the seizures. He is also Type I diabetic. After each seizure, the law prevents him from driving for 6-months in their state and 1-year in the adjoining state. In addition to the absenteeism from work, the days when he has a seizure and must leave work, and his inability to drive to work (by law), he is not employable.

Her husband is in default on his student loan (federal loan). Her husband had no income for the past 2 years.

They filed their tax returns a few weeks ago, but they did not realize that the student loan was in collection. The IRS took the entire income tax return (approx. $9,200).

What are her options to get some of this money returned to her (this was all collected from her pay)? Should she file an amended return, Head of Household, and list him as a dependent only? She realizes that this would only give her a standard deduction of $17,500, which would cause her to lose money in the refund.

Does she have any other options? She used TurboTax software for her initial federal and Georgia returns.