If a child is diagnosed as high functioning autistic, is that considered disabled?

[hispanicqt00]

She is registered with the state as disabled because of this diagnosis but is a minor so I don’t yet know her capability for work.

[DoninGA]

You can indicate disabled for the child but if they are under the age of 19 there is no tax benefit.  Unless the child is over the age of 12 and you have dependent care expenses so you can work, those can be claimed on your tax return.

[hispanicqt00]

Thank you! That’s very helpful! I have sitter expenses sometimes for work even though she is 12 because she’s not able to be on her own for more than an hour. It’s just a teen I trust and not a provider. Does this still count as a deductible expense? If I take the standard deduction, does it even matter?

[DoninGA]

Taking the Standard Deduction does not matter.  The sitter expenses would be a qualified Child and Dependent Care Expense on your tax return.

To enter, edit or delete Child and Dependent Care expenses -

• Click on Federal Taxes
• Click on Deductions & Credits
• Click on I'll choose what I work on (if shown)
• Under You and Your Family
• On Child and Dependent Care Credit, click on the start or update button

Or enter child care deductions in the Search box located in the upper right of the program screen. Click on Jump to child care deductions

[Opus 17]

For tax purposes, disabled means "unable to perform substantial gainful work" due to a condition that is permanent or will last at least one year.  The ability to work a minimum wage job is usually considered proof that a person can perform gainful work.  (However, working in a sheltered workshop that provides rehab services is not considered gainful work even if the person is paid.).  

Many people who might be medically disabled aren't considered disabled for tax purposes because they can still perform gainful work.  It depends  on your specific circumstances. 

For a child under age 13, marking them disabled in the tax program has no effect on your return.  Between age 13 and 18, a disabled child can qualify for the dependent care credit (if you pay for care so you can work) even though non-disabled dependents age out of the that credit at 13.  Over age 18, being disabled may allow you to claim your child as a dependent even though children normally age out of dependent status at 19 or 24, and there are a couple of other tax benefits that might go along with that.  

[Opus 17]

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@hispanicqt00 wrote:

Thank you! That’s very helpful! I have sitter expenses sometimes for work even though she is 12 because she’s not able to be on her own for more than an hour. It’s just a teen I trust and not a provider. Does this still count as a deductible expense? If I take the standard deduction, does it even matter?

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If your child is disabled (per the definition I gave above), and you pay someone else to watch your child so you can work (and your spouse if you are married), then you can apply the care costs toward the credit.  Also the credit is allowed for a child who is 12 even if they are not disabled, as long as you pay for care so you can work.  The child ages out of the credit when they turn 13, unless they meet the definition of disabled.

Where you might have a problem is with "high functioning".  If the child is capable of performing gainful work, but has a personality so they are not mature enough to be left alone at age 13, that by itself does not qualify you to claim the credit.  There are lots of kids who probably shouldn't be left home alone, but the dependent care credit doesn't apply once they turn 13, even if they aren't mature enough.  It comes down to the tax definition of disabled, which is based on the concept of being able to work for a living (even if the person is not presently employed, are they able to be employed.)

Specifically for the child and dependent tax credit, that is separate from the standard deduction.  The credit is is 20%-35% of the first $3000 of qualifying care costs, which works out to $600 for most people.  The provider does not have to be a day care professional, but you will have to give the IRS the SSN of the care provider, and the IRS will look for matching income on the care provider's tax return, so if they have been expecting to not pay taxes on this income, that might be a rude awakening.  Your state may also have a dependent care credit if you claim the federal credit. 

[hispanicqt00]

Thank you! I will just let that drop since our teen sitter is definitely not expecting to pay taxes.

[Opus 17]

@hispanicqt00 

As a point of information, if the caregiver works in your home according to your schedule, they are your household employee. You would generally be required to give them a W-2 if you pay them more than $2200 in a year, and you would be required to report the household employee on your tax return and pay household employee tax (which is the equivalent of Social Security and Medicare). However, a person under age 18 who is a full-time student would not be subject to the household employee tax. 

https://www.irs.gov/taxtopics/tc756

Then, the employee would use the W-2 to file their own tax return. As long as their total income for the year is less than $12,500, they would not actually owe any income tax.  You could then claim the child and dependent care credit without raising any red flags at the IRS.

Obviously, you would not be the first person to pay their babysitter without paying income tax. I mention this so you will know what the law says and then you can decide what to do about it.