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Tax Benefits & Free Tax Preparation for Taxpayers with Disabilities

By Guest Blogger Richard Keeling, Senior Tax Analyst, Stakeholder Partnerships Education and Communications, Wage and Investment Division, Internal Revenue Service (IRS)

Taxpayers with disabilities and parents of children with disabilities may qualify for a number of IRS tax credits and benefits. If you or someone else listed on your federal tax return has a disability, you may be eligible for one of the tax credits listed below. In addition, there are several programs that can help people with disabilities prepare their taxes and file them electronically for free.

1. Standard Deduction: Taxpayers who are legally blind may be entitled to a higher standard deduction on their tax return.
2. Gross Income: Certain disability-related payments, Veterans Administration disability benefits and Supplemental Security Income (SSI) are excluded from gross income.
3. Impairment-Related Work Expenses: Employees who have a physical or mental disability limiting their employment may be able to claim business expenses in connection with their workplace. The expenses must be necessary for the taxpayer to work.
4. Credit for the Elderly or Disabled: This credit is generally available to certain taxpayers who are 65 and older, as well as to certain taxpayers with disabilities who are younger than 65 and are retired on permanent and total disability.
5. Medical Expenses: If you itemize your tax deductions using Form 1040, Schedule A, you may be able to deduct medical expenses. SeeIRS Publication 502, Medical and Dental Expenses.
6. Earned Income Tax Credit (EITC): EITC is available to taxpayers with disabilities, as well as to the parents of a child with a disability. If you retired on disability, taxable benefits you receive under your employer’s disability retirement plan are considered earned income until you reach minimum retirement age. The EITC is a tax credit that not only reduces a taxpayer’s tax liability but may also result in a refund. Many working individuals with a disability who have no qualifying children, but are older than 25 and younger than 65, do qualify for EITC. Additionally, if the taxpayer’s child has a disability, the age limitation for the EITC is waived. The EITC has no effect on certain public benefits. Any refund you receive because of the EITC will not be considered income when determining whether you are eligible for benefit programs, such as Supplemental Security Income and Medicaid.
7. Child or Dependent Care Credit: Taxpayers who pay someone to care for their dependent or spouse, so they can work or look for work may be entitled to claim this credit. There is no age limit if the taxpayer’s spouse or dependent is unable to care for themselves.

For more information on tax credits and benefits available to taxpayers with disabilities, see Publication 3966, Living and Working with Disabilities or Publication 907, Tax Highlights for Persons with Disabilities, available on the IRS website at http://www.irs.gov/ or by calling 800-TAX-FORM (800-829-3676).

The IRS Volunteer Income Tax Assistance Program (VITA) and the Tax Counseling for the Elderly (TCE) Programs offer free tax help for taxpayers who qualify.

Trained community volunteers may help with special credits, such asEITC, Child Tax Credit and Credit for the Elderly or Disabled. In addition to free tax return preparation assistance, most sites also offer free electronic filing (e-filing). Individuals taking advantage of the e-file program will receive their refunds in half the time compared to returns filed on paper – even faster when tax refunds are deposited directly into one's bank account.

Volunteer Income Tax Assistance Program (VITA)

The VITA Program offers free tax help to people with low to moderate-income (generally, $49,000 and below) who cannot prepare their own tax returns. Certified volunteers (sponsored by various organizations) receive training to help prepare basic tax returns in communities across the country. VITA sites are generally located at community and neighborhood centers, libraries, schools, shopping malls and other convenient locations. Most locations also offer free electronic filing. To locate the nearest VITA site, call 1-800-906-9887 or visit the VITA site list online. (This list does not include every VITA site.)

Tax Counseling for the Elderly (TCE)

The TCE Program provides free tax help to people ages 60 and older. Trained volunteers from nonprofit organizations provide free tax counseling and basic income tax return preparation for senior citizens. These volunteers are often retired individuals associated with nonprofit organizations that receive grants from the IRS. As part of the TCE Program, AARP offers the Tax-Aide counseling program at more than 7,000 sites nationwide during the filing season. Trained and certified AARP Tax-Aide volunteer counselors help people of low-to-middle income, with special attention to individuals ages 60 and older. 

For more information on TCE, call 1-800-829-1040. To locate the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website. 

Additional information about tax benefits for people with disabilities is available in the Tax Credits section of Disability.gov.

Richard Keeling is a Senior Tax Analyst in Stakeholder Partnerships Education and Communications in the Wage and Investment Division of the IRS.  His primary responsibility is working with the Taxpayers with Disabilities Program.

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