If you're disabled and receive Social Security disability benefits—either SSDI or SSI—you can qualify for certain tax credits. These credits will reduce the taxes you owe on the taxable income you receive.
Tax credits for those with disabilities include the:
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.
These credits are in addition to several deductions, income exclusions, and tax-advantaged accounts for people with disabilities.
You might qualify for the child and dependent care credit in one of these three situations:
To qualify for this credit, you must pay caregiver expenses for an individual who:
The credit is worth 20%-35% of the caregiver expenses. Qualifying caregiver expenses that are eligible for this credit are those paid 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 for the person needing care. But expenses for household services like housekeeping qualify if they are at least partly for the well-being and protection of the disabled person.
You can't get a credit for caregiver expenses paid to:
You can receive this credit regardless of how much income you receive. But the amount of the credit is reduced for higher-income taxpayers. (In other words, 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. This makes the maximum credit worth $1,050. The minimum credit is 20% of caregiver expenses (or $600 on the maximum of $3,000 of expenses).
This credit is not refundable. This means you get it only if you (and your spouse, if you're married) owe income tax to the IRS. You can calculate the credit on IRS Form 2441. For more information, see IRS Publication 503, Child and Dependent Care Expenses.
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. (The credit can also provide relief to nondisabled people over 65, but this article addresses only the credit for the disabled.)
To qualify for the credit for the disabled, a doctor must certify that you're 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. 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 |
Here are some examples:
If you do qualify for the credit for the disabled, the amount ranges from $3,750 to $7,500, depending on your filing 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.
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:
As with the credit for the elderly and disabled, there are income limits for receiving the EITC, but they are not as strict. And 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 the 2022 tax year, you qualify for the EITC if your annual earned income for 2022 was less than:
For the 2023 tax year, you qualify for the EITC if your annual earned income for 2023 is less than:
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, for the 2022 tax year, the maximum amount of the credit ranges from $560 for no qualifying children to $6,935 with three or more qualifying children. For the 2023 tax year, the maximum amount of the credit ranges from $600 for no qualifying children to $7,430 with three or more 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.
Receiving SSDI or SSI benefits doesn't prevent you from receiving a tax refund.
Whether you owe taxes or not, you should file a tax return if you think you qualify for any of the above credits discussed above. If you don't file a tax return, you will miss out on many of the credits. If you qualify, you'll get the credits in the form of a tax refund after you file your tax return.
Updated January 30, 2023
Go back to the previous article to learn about tax breaks for people with disabilities.
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