Tax Credit for Dependents With Disabilities

Qualifying Disabilities

Taxpayers may receive a tax credit for dependents that suffer either physical or mental impairment. Blindness, for instance, can positively affect the level of standard deduction the taxpayer may claim. The Internal Revenue Service defines a disability as any mental or physical condition that renders someone unable to work or severely limits that person's ability to perform normal daily tasks unaided.

Some disability-related tax credits can depend on the age of the dependent. Taxpayers who must employ child care of in-home medical assistance for dependents aged 13 or younger, for instance, may have the ability to deduct a portion of what they pay to those providers. The same credit may apply to a taxpayer who must hire nurses or other regular caregiver services for a disabled husband, wife or other adult family member. The Internal Revenue Services offers additional tax credits specifically for elder care in cases where taxpayers must provide for the needs of a person at least 65 years of age.

Low-income taxpayers with disabled dependents can often qualify for a federal Earned Income Tax Credit, or EITC. According to the Internal Revenue Service, taxpayers who care for a permanently and completely disabled dependent can qualify for the EITC if their income falls below a certain level as calculated by a formula. Depending on the amount of tax otherwise owed, the EITC can drastically reduce or eliminate the taxpayer's debt. In some cases, the taxpayer may even receive a refund in the form of a check from the U.S. Treasury Department.

Taxpayers with disabled or ailing dependents should remember to take any applicable medical expenses when filing their taxes in an effort to reduce their tax liability. Schedule A of the familiar Form 1040 allows the filer to deduct hospital expenses, dental bills, pharmaceutical purchases and other necessary expenditures for the care of any disabled person in the household. The Internal Revenue Service lists such specific items as artificial limbs, hearing assistance devices, service animals, special education expenses and access ramps as eligible deductions. Alternatively, employees who participate in a dependent care benefit plan can fill out Tax Form 2441 to remove the cost of such benefits from their taxable income.