disability

[Ah_Abd]

Any special tax credits for disabilities? and what really qualify as a disability for IRS?

[xmasbaby0]

For disabled adults:

There is an extra amount added to your standard deduction if you are legally blind.   Your federal return does not provide any other credits or deductions for saying you are disabled, with one possible exception.  

There is a credit for the Elderly and Disabled which is so small that very few people benefit from it—-it has not been updated/increased by Congress for decades.

ELDERLY OR DISABLED CREDIT https://www.irs.gov/help/ita/do-i-qualify-for-the-credit-for-the-elderly-or-disabled

There are some states that provide various credits to elderly/disabled folks, so watch for that when you prepare your state return.   The states that I know of that have anything for elderly/disabled are AZ, CT, DE, IA, MO, ND, NJ, NY, VE.   There may be others.

[DawnC]

• Disability income from an employer and benefits from a disability insurance policy your employer paid for are typically taxable. Benefits from an insurance policy that you paid for with after tax money are typically not taxable.
• If Social Security disability is your only source of income, your benefits usually aren't taxable. However, if you (and your spouse, if you’re married) earn other income, your benefits may be taxable, depending on your income level.
• If your disability income is taxable, you may qualify for the federal Credit for the Elderly and Disabled. To qualify, you must be permanently and totally disabled and meet certain income requirements.
• You may be eligible for the Child and Dependent Care Credit if you (or your spouse if filing a joint return) paid someone to take care of a qualifying person with a disability, including yourself or your spouse, so that you or your spouse could work.

Tax Tips for legally disabled taxpayers

[Ah_Abd]

Thanks, so basically spouse doesnt work, has a disability, we pay for preschool, can we claim these expenses?

[DawnC]

The earned income requirement and the work/look-for-work requirement for one spouse is waived if they were a full-time student or disabled (if they lived with the other spouse for more than 6 months in 2023).

Dependent care credit.   There are several other tests you must meet to claim the credit:

• You (and your spouse, if you're married) must have "earned income," meaning money earned from a job. Non-work income, such as investment profits, doesn't count.
• You must have paid for the care so that you could work or look for work.  Being a full-time student or a parent unable to care for themselves does count as "working" for the purposes of the credit, even if you don’t receive any income for it.
• If you are married, you must file a joint tax return.
• You must provide the name, address and Taxpayer Identification Number (TIN) of the person who provided the care. The taxpayer ID number is either a Social Security number (SSN) or an Employer Identification Number (EIN). Ask your care provider for the number.

Tax Tips-Disabled Spouse 

What is the Dependent Care Credit?