Tax Credits for People With Disabilities Who Receive SSDI or SSI Benefits

You may benefit from a tax credit if you have caregiving expenses for a disabled person or low income.

If you’re disabled and receive Social Security disability benefits—whether SSDI or SSI—you can qualify for certain tax credits. These will reduce the taxes you owe on taxable income you earn. These are in addition to several deductions, income exclusions, and tax-advantaged accounts for people with disabilities.

Tax credits for those with disabilities include the:

  • child and dependent care credit
  • credit for the elderly and the disabled
, and
  • earned income tax credit.


Unlike a tax deduction, which only reduces your taxable income, a tax credit reduces the amount of tax you have to pay. For example, a $1,000 credit reduces the tax you owe by $1,000. Moreover, you can collect the earned income tax credit even if you owe no tax. You must file a tax return to claim these credits.

Credit for Dependent Care for a Disabled Spouse, Child, or Parent

If you’re married and your spouse incurs expenses for your care so that he or she can work, you and your spouse may qualify for the child and dependent care credit. You can also get this credit for expenses that you pay for a caregiver for your elderly parent so that you can work, if your parent is your financial dependent. You can also get this credit for caregiver expenses paid for a teenage or adult child who is mentally or physically incapable of self-care.

To qualify for this credit, caregiver expenses must be incurred for an individual who:

  • is physically or mentally unable to care for himself or herself, and

  • lived with the person claiming the credit for more than half the year.


Qualifying caregiver expenses for this credit are those that are incurred to allow a spouse of a disabled person, a parent of a teenage or adult child with disabilities, or an adult child with elderly parents to work or look for work—for example, a caregiver comes in during the day to look after you so your spouse can work during the day. Qualifying expenses don’t include amounts paid for food, lodging, clothing, education, or entertainment. However, expenses for household services like housekeeping qualify if they are at least partly for the well-being and protection of the disabled person.

There are no limits on income for you to receive this credit. However, the amount of the credit is reduced for higher income taxpayers. (The percentage of the expenses for which you get a credit is dependent on your income.) The maximum credit is equal to 35% of up to $3,000 in qualifying caregiver expenses, per child. Thus, the maximum credit is $1,050. The minimum credit is 20% of caregiver expenses (or $600 on $3,000 of expenses).

The caregiver can't be the spouse of a disabled person, the parent of a disabled child (unless the child is 13 or older), a child under the age of 19, or a dependent on the tax return of the person claiming the credit.

This credit is not refundable. You get it only if you and your spouse owe income tax to the IRS. You figure the credit on IRS Form 2441. For more information, see IRS Publication 503, Child and Dependent Care Expenses.

Credit for the Elderly or the Disabled

This credit helps people under 65 who retired from work on permanent and total disability and are receiving taxable disability income from their former employer's accident plan, health plan, or pension plan. (It also gives a credit to nondisabled people over 65, but this article addresses only the credit for the disabled.) A doctor must certify that you are unable to perform significant employee job duties or be self-employed because of your physical or mental condition.

Unfortunately, most people with disabilities don’t qualify for the credit because they have too much income. For example, a single person who receives disability benefits of $417 or more per month ($5,000 or more per year) will not qualify. You won't qualify for the credit if your adjusted gross income (AGI) or SSI or SSDI benefits are more than shown in the following chart:

Filing Status

AGI is equal to or more than:

SSI, SSDI, other nontaxable pensions equal to or more than:

Single

$17,500

$5,000

Married filing jointly, both spouses qualify

$25,000

$7,500

Married filing jointly, one spouse qualifies

$20,000

$5,000

Thus, for example, if you’re single and disabled and receive $500 in SSI or SSDI payments per month, you don’t qualify for the credit. If you receive only $300 in SSDI per month, but have $18,000 in an annual taxable disability pension, you still won’t qualify for the credit.

If you do qualify for the credit for the disabled, the amount ranges from $3,750 to $7,500, depending on your fling status and income. You must complete IRS Schedule R to figure the amount of the credit. This credit is nonrefundable. This means you get it only if you owe income tax to the IRS. For example, if you qualify for a $3,750 credit and owe $4,000 in income tax, you’ll have to pay only $250 in tax. But if you owe no income tax you get no credit.

Earned Income Tax Credit

If you’re disabled and you or your spouse work, you can qualify for the Earned Income Tax Credit (EITC). This credit is available to all low income workers, not just the disabled. To qualify for the EITC, you must:

  • be between 25 and 65 years old
  • not be someone else's dependent or child for EITC purposes
  • live in the United States for at least half the year

, and
  • have earned income from working for someone or from running or owning a business—SSI and SSDI payments do not count.



As with the credit for the elderly and disabled, there are income limits for receiving the EITC, but they are not as onerous. The income limit is higher if you have one or more “qualifying children.” (To be a qualifying child, your child must be under age 19 or a full-time student under age 24 at the end of the tax year or permanently and totally disabled at any time during the year, regardless of age.)

For 2019, you qualify for the EITC if your annual earned income is less than:

  • $15,570 ($22,370 married filing jointly) with no qualifying children


  • $46,884 ($55,952 married filing jointly) with three or more qualifying children.



The IRS has an EITC Assistant tool on its website that you can use to see if you qualify for the credit. If you do qualify, the maximum amount of the credit ranges from $529 for no qualifying children to $6,557 with three qualifying children. The EITC is refundable, which means you get the full credit even if the amount exceeds the income tax you owe—or even if you owe no income tax at all.

To obtain the EITC, you must file an income tax return and attach Schedule EIC if you have one or more qualifying children.

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