Medical deductions are one example of tax breaks you may be eligible for if you or a family member has disability-related income or expenses. Here are others:
ABLE accounts. Achieving a Better Life Experience (ABLE) accounts can help you save and pay for disability-related expenses without losing Medicaid eligibility or Supplemental Security Income (SSI). The account holder and designated beneficiary must have been disabled before age 26.
Maximum annual contributions to ABLE accounts may not exceed the gift tax exclusion ($14,000 for 2018), Funds in the accounts accumulate tax-free and distributions are exempt as long as they are applied to qualifying disability expenses.
Business benefits. If your business incurs expenses to provide access for disabled persons pursuant to the Americans with Disabilities Act, you may qualify for the disabled access credit. Are you an employer? You may qualify for the work opportunity tax credit when you hire SSI recipients, vocational rehabilitation referrals, or veterans with disabilities. If you pay to remove physical, structural, or transportation barriers to accommodate people with disabilities, you may be able to deduct these expenses.
Credit for the elderly or disabled. You can claim this tax credit even if you’re under age 65, provided you’re retired due to permanent and total disability.
Dependency benefits. As a parent, you can generally claim permanently and totally disabled children as dependents regardless of your child’s age. If you pay someone to provide home care for a dependent or spouse who is unable to care for themselves, you may be able to claim the dependent care credit, regardless of the disabled person’s age.
Earned income credit. If you work and are disabled and between ages 25 and 65, you may qualify for the earned income credit whether or not you have children. This credit can result in a refund even if you owe no taxes Earnings that qualify for the credit include taxable benefits received from your employer’s disability retirement plan.
Gross income. Certain disability-related income is nontaxable, such as SSI and allowances paid by the Department of Veterans Affairs.
Impairment-related work expenses. If you’re an employee with a physical or mental disability that functionally limits your employment, you may be able to claim business deductions for attendant care and other workplace expenses that help keep you employed.
Standard deduction. Are you legally blind? A higher standard deduction is available.
Call us for an appointment to discuss these and other tax breaks that can help reduce your tax bill.