Living with a disability presents unique challenges, but understanding and leveraging available tax benefits can provide much-needed financial relief.
In this article, we’ll explore the various tax benefits available to individuals with disabilities.
Medical expenses deduction
Medical expenses can accumulate quickly for individuals with disabilities. Fortunately, the IRS allows you to deduct unreimbursed medical expenses that exceed 7.5% of your adjusted gross income (AGI).
This deduction encompasses a wide range of expenses, including diagnosis, treatment, and prevention of diseases plus expenses for equipment, supplies, and diagnostic devices necessary for managing the disability. Here are some examples of deductible medical expenses:
- Doctor and specialist visits
- Inpatient and outpatient hospital care, including surgery, laboratory tests, X-rays, and other diagnostic procedures
- Prescription drugs and over-the-counter medications prescribed by a healthcare professional
- Medical tests and exams, including blood tests, urinalysis, MRI scans, CT scans, and other diagnostic imaging procedures
- Durable medical equipment such as wheelchairs, walkers, canes, crutches, and adaptive equipment needed for mobility or activities of daily living
- Prosthetic devices, including artificial limbs, braces, and other devices necessary for bodily functions
- Physical therapy, occupational therapy, speech therapy, and other rehabilitation services
- Medical supplies such as bandages, catheters, and syringes
- Transportation expenses to and from medical appointments, including mileage, parking fees, tolls, and public transportation fares
- Home modifications or improvements necessary for medical reasons, such as installing ramps, widening doorways, or modifying bathrooms for accessibility
- Guide dogs and service animal expenses
- Specialized medical treatments prescribed by a healthcare professional that are not covered by insurance, such as acupuncture, chiropractic care, and alternative medicine therapies
Earned Income Tax Credit (EITC)
The Earned Income Tax Credit (EITC) is a refundable tax credit designed to assist low to moderate-income individuals and families. Many disabled individuals who are working or have earned income may qualify for this credit, providing valuable financial assistance.
To qualify for the EITC, you must meet certain eligibility criteria, including having earned income from employment, self-employment, or farming. The amount of credit depends on your income, filing status, and the number of qualifying children you have, if any. A qualifying child must meet various criteria, including age, residency, and dependent status.
Child and Dependent Care Credit
Caring for a dependent with a disability often requires additional financial resources. The Child and Dependent Care Credit provides tax relief for eligible expenses incurred while caring for a dependent, including individuals with disabilities.
To qualify for the credit, the care must be provided for a work-related purpose, such as allowing you and your spouse (if married filing jointly) to work, look for work, or attend school full-time. If one spouse is not able to care for themselves and is claimed as a dependent, they are also considered to be working. Expenses paid to a qualified care provider for care provided in or out of your home may be eligible for the credit. Qualifying care providers can include daycare centers, babysitters, preschools, and summer day camps.
The amount of this credit is based on your AGI. The maximum amount of eligible expenses that can be considered for the credit is $3,000 for one qualifying individual or $6,000 for two or more qualifying individuals.
Individuals with disabilities should take advantage of tax benefits when possible
At Hunter & Everage, we understand the importance of maximizing financial resources for individuals with disabilities. By leveraging available tax benefits and credits, our clients can alleviate some of the financial burdens associated with living with a disability and secure their financial futures.
Our dedicated team of disability attorneys in Richmond, Virginia, is here to provide support every step of the way, helping you achieve financial stability and peace of mind. Contact us today to learn more about how we can assist you in navigating tax benefits and other legal matters related to disability rights and advocacy.
