Both taxpayers with disabilities and the parents of children with disabilities may qualify for a variety of tax benefits. A number of these benefits were described in “IRS Tax Tips for Disabled Taxpayers” (2010-24), dated February 4, 2010.

1) Legally blind taxpayers may be allowed a higher Standard Deduction.

2) Certain disability-related payments, Veterans Administration disability benefits, and Supplemental Security Income are excluded from gross income for disabled taxpayers.

3) If there are business expenses incurred that are necessary for the taxpayer to overcome a physical or mental disability that limits their ability to work, the disabled taxpayer may be allowed to claim those expenses as “impairment-related work expenses” in regards their workplace.

4) There is a “Credit for the Elderly or Disabled” allowed for taxpayers 65 years old or older and to taxpayers under 65 who have retired on permanent and total disability.

5) Disabled taxpayers who itemize their deductions on Form 1040 Schedule A can deduct certain medical expenses, as outlined in “Medical and Dental Expenses” (Publication 502).

6) Disabled taxpayers and the parents of a dependent with a disability are eligible for the Earned Income Tax Credit (EITC). Taxpayers taking the EITC reduce their tax liability and can generate a tax refund. Any taxpayer retiring because of a disability is taxed on benefits paid under an employer’s disability retirement plan until the taxpayer reaches the minimum retirement age. Working taxpayers between the ages of 25 and 65, even without qualifying children, are still eligible for the EITC. If the taxpayer has a disabled child, there is no age limitation. A refund received by a taxpayer under the EITC is not considered income when determining that taxpayer’s eligibility public benefit programs, including Supplemental Security Income and Medicaid.

7) Taxpayers using paid home care for their dependent(s), whether a child or spouse, can claim the “Child or Dependent Care Credit.” If the taxpayer’s dependent or spouse is unable to care for themselves, the age limitation is waived.

More information on tax issues for disabled taxpayers can be found in the “Living and Working with Disabilities” (Publication 3966) 907), “Tax Highlights for Persons with Disabilities” (Publication 907) and other information on the IRS website. Disabled taxpayers should also consult with CPAs, professional tax preparers or other tax practitioners for advice concerning their specific tax situation.

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