If you suffer from a disability that keeps you from working, you also have a limited income. Fortunately, the federal government offers tax relief for people with disabilities. Taxpayers with disabilities, and parents of children with disabilities, may qualify for a number of IRS tax credits and benefits. If you or someone on your tax return is disabled, you may qualify for some of the following tax benefits:

1. Tax Benefits for Those with Disabilities
If you suffer from a disability that keeps you from working, you also have a limited
income. Fortunately, the federal government offers tax relief for people with disabilities.
Taxpayers with disabilities, and parents of children with disabilities, may qualify for a
number of IRS tax credits and benefits. If you or someone on your tax return is disabled,
you may qualify for some of the following tax benefits:
Elderly and Disabled Tax Credit
This is a tax credit that is available to certain taxpayers age 65 and older, as well as some
taxpayers with disabilities under age 65. If you had to retire early due to a permanent and
total disability, you might qualify for the Elderly and Disabled tax credit. This reduces
the amount of income tax you owe on a dollar-for-dollar basis. To claim the credit, you
must complete and attach a Schedule R to your return.
Standard Deduction
Legally blind or partially blind taxpayers may be eligible to claim a higher standard
deduction when filing their tax returns. To receive the added deduction, you may need to
provide a statement from a certified eye doctor or optometrist explaining your vision
impairment.
Medical Expenses
Although this deduction is available for all taxpayers, a disability may significantly
increase your itemized deduction for medical expenses. The medical expenses deduction
includes a wide range of expenses related to maintaining your health and will include
your hospital and doctor bills, as well as prescription medications. These expenses should
be totaled for the tax year using the 1040 Schedule A form. Deduct the amount that
exceeds 7.5 percent of your adjusted gross income.
Gross Income Exclusions
Some disability-related payments such as Veterans Disability Benefits and Supplemental
Security Income (SSI) may be excluded from your total gross income.
Impairment-Related Work Expenses
Employees with work-related limitations due to physical and mental disabilities may be
able to claim business-related expenses required to maintain employment. To claim these
deductions, you must be able to prove that the expenses are necessary for you to be
employable.

2. Earned Income Tax Credit
This credit reduces your tax liability and is available to disabled taxpayers, as well as to
the parents of a child with a disability. If you receive tax exempt disability payments and
your other taxable income is relatively low, the earned income credit may increase your
tax savings and may result in a refund. Even if you don’t owe taxes for the year, you
should still claim the credit because it allows you to claim a refund when it exceeds your
tax liability.
Child or Dependent Care Credit
Taxpayers who pay someone to care for their dependent, child or spouse so they can
work or look for work may qualify for this credit. There is no age limit to qualify if the
person under your care is unable to care for himself.
Seek help with your tax return to optimize your financial situation. The IRS has created a
program called Volunteer Income Tax Assistance (VITA) to help people with low to
moderate incomes file their tax returns. These trained volunteers can help prepare your
returns and determine which tax benefits may maximize your refund.
If this is the first year that you received Social Security disability benefits, you must pay
tax on the lump-sum retroactive award. You do not want to pay more tax than necessary,
so hiring a professional experienced in preparing taxes for people with disabilities can
save you money.