If you are a person with a disability, the IRS has created several different credits, deductions, and exemptions with respect to your tax returns. They are intended to lower your overall tax liability and to offset any additional expenses you incur for equipment, medical bills, and home modifications. Here is a quick review:
IRS Tax Credits
The Credit for the Elderly or Disabled is designed to lower your overall tax liability at the end of the year. The IRS website offers an online calculator that you can use to see if you are eligible for this credit. Eligibility is determined based on your age, your spouse’s age(if applicable) and your adjusted gross income, and the amount of taxable and non-taxable income/pensions.
Likewise, the Earned Income Tax Credit is also available to you if you meet the IRS’s income requirements. You may also qualify if you are a non-disabled person who has a child with disabilities.
Tax Deductions
If you require accessibility supplies or adjustments in order to perform your role at work, you may be able to deduct the expense from your tax return. The catch: you must have paid for these items out of pocket, and they must be essential to performing your job. An example would be a text magnifier or a modified keyboard that would accommodate your disability.
You can also claim a higher standard deduction if you are legally blind. Additional allowances are provided for age. For example, if you are 65 or over and legally blind, you would receive a higher standard deduction based on age plus blindness.
IRS Tax Exemptions
If you receive Supplemental Security Income (SSI) or disability payments from the VA, you’re exempt from federal tax liability altogether. The same holds true for employer-based disability payments in most cases.
The IRS devised these allowances as a way to help people with disabilities offset the cost of adaptive equipment, mobility aids and medical care/services. As with any IRS allowance, it helps to talk with a qualified tax advisor if you’re not sure you meet the eligibility and income guidelines for each.
