I recommend you get advice from an elder care specialist firm (they usually combine tax planning, financial planning and legal planning). There are things you need to know now, and plans you can make. At some point, if your spouse becomes disabled enough to require nursing home care (more advanced than assisted living), Medicaid may pick up the cost, but that can have strings attached.
While your spouse needs assistance, but not full nursing home yet, some states have a Medicaid program that will pay a caregiver (including a spouse) to care for the patient in their home, because it is less expensive than going to a nursing home. These difficulty-of-care payments are usually not taxable to the caregiver. However, these programs are complicated and vary from state to state, and you should at least speak to a social worker to assist you in navigating the options, if not a full elder law and financial firm.
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 (2021-2). 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 at all 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
See schedule R for detailed calculations. https://www.irs.gov/pub/irs-pdf/f1040sr.pdf
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.
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