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Tax For Individuals With Disabilities


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   By John Wolf 

Individuals with disabilities are granted by the IRS a variety of programs to help them with their tax reports and their tax credits and deductions. This way the government recognizes that those who have disabilities and need to struggle harder for earning their money and have to spend more for their health need help by reducing their tax liability and help them file a tax return. Below you can read about what the IRS offers to the tax-payers with a disability.

 The Way that IRS help Taxpayers With Disabilities To File

The IRS runs programs that will help disabled people that can not pay an expansive accountant. In these programs, the IRS work with local accounting businesses that do the job for the disabled tax-payers. This way, the IRS takes the stress from the disabled tax-payers and help them to pay the tax they must pay with no unaffordable cost. The IRS has a training program for the accountants that participate in its help programs for the disabled, so you can trust their ability if you need the help they offer.

IRS: Special Rules Help Many with Disabilities Qualify for Earned Income Tax Credit

The IRS says that many with disabilities miss out on this valuable credit because they do not file a tax return. EITC could put a refund of up to $6,318 into an eligible taxpayer’s pocket. Many people who do not claim the credit fall below the income threshold requiring them to file. Even so, the IRS urges them to consider filing anyway because the only way to receive this credit is to file a tax return and claim the EITC.

Below are the programs available for tax-payers with disabilities, retired people, and veterans.  

Taxpayers With Disabilities

Being a disable entitle you for the Volunteer Income Tax Assistance (VITA) program for free preparation of your tax report. You can use VITA that offers IRS-certified volunteers free essential tax return services through electronic filing. This program is entirely free. Those volunteers work with those who are disabled or those who earn low-income.

You can be confident with these volunteers know all the tax deductions that are available to you.

Taxpayers On Retirement-Age  (With or Without Disabilities)

If you are over 60 years old and disabled, you can get in touch with Tax Counseling for the Elderly (TCE). This program helps older tax-payers to know their tax liabilities, pension, and other retirement-related issues. The TCE is not exclusively for disabled regular retired people can apply for TCE help.

VITA and TCE volunteers are available in places like libraries, community centers, schools, and other community places.

One way is to call 800-906-9887 where you can find the volunteers near you. If you want to enjoy the TCE program, then you’ll look for the AARP, that has a Tax-Aide program operates most of the places.

Veterans And Disabled Veterans

If you are a veteran with a disability, you can get help as the IRS is a partner with the VA, you can get access to the relevant tax information. The veterans with a disability you can use the VITA program. As a veteran with no disability, you can get free tax preparation. The IRS and VA entered an agreement called Memorandum of Understanding (MOU) that offers free tax-return to the veterans and their families.

ELECTRONIC W-2/W-2C FILING

WHAT IS BUSINESS SERVICES ONLINE?

Business Services Online offers Internet services for businesses and employers who exchange information with Social Security. This handbook focuses on wage reporting by employers as well as third-party submitters.

As a registered Business Services Online user who selected wage reporting suite of services during registration, you are able to:

  • Create/Resume Forms W-2/W-3 Online,
  • Create/Resume Forms W-2c/W-3c Online,
  • Save Submitted Reports to Your Computer,
  • Submit/Resubmit a Formatted Wage File,
  • Submit a Special Wage Payments File,
  • Check W-2/W-2c reports for formatting accuracy before sending them to Social Security Administration,
  • View Submission Status to check report status, errors, and notice information for previously submitted wage reports,
  • View Employer Report Status to check report status or view errors for reports submitted for your company by a third party, and
  • Request an Extension to File a Resubmission.

All about Disability Tax Deductions

The law offers specific disability tax deductions and credits when you are:

  • Legal blindness
  • Physically or mentally disabled
  • Elderly or disabled (or both)
  • Mentally or  physically incapacitated (with gross income)

According to what category you fall, you can enjoy two credits and three deductions that we will review below.

Credit For The Elderly Or The Disabled

If you are more than sixty-five years old or retired with total disability, you may enjoy the Elderly or the Disabled credit. This credit is targeted to those who have a minimal income such as pensions and social security. Unless you are retired, you would not be qualified for this credit.

You will be qualified if you are under 65 with a disability and retired because of your disability.  You will need a doctor to approve your disability, but without the need for a letter from the doctor.

Blind Taxpayers Can Get Higher Standard Deduction

A higher standard deduction can be granted to you if you are legally blind.  Those who are legally blind can increase the regular deduction by $1,600 if they are filing as Head of household or single.

Those who are married and filing joined and one of the spouses is blind you can elect to increase your deduction by $1,300. If you are over 65, you cloud to increase the deduction too.

Deductions of Medical Expenses

You can choose to itemize your deduction and get a deduction for your medical expenses; it includes insurance premiums. If you want to qualify for 2019 and later, you need your costs to be more than 10% of your adjusted gross income. Not disabled people can use that deduction if they forgo the standard deduction for itemization.

Disability Payments As Non-Taxable Income

The IRS recognizes the difficulties of living on disability income, so it doesn’t always count this income as taxable. You can keep more of your income in hand with not paying to the government.

You will have to declare your non-taxable on your tax return, but it will be exonerated from paying tax.

Income the IRS is exonerating its tax includes:

  •  Disability payments connected to military service
  • Income that comes from public welfare funds
  •  Compensation as a Worker
  • Damages paid for injuries, illness, or loss of use of your body/functions, or disfigurement
  • Benefits as a result of disability through auto insurance policies

If you are receiving Social Security benefits for disability, most of it goes untaxed. There are cases that you still have to pay on some income.

Earned Income Tax

The  “Earned Income Tax Credit” (EITC)    is a credit dedicated to those who make a low income, as part-time workers. You to file your income with no tax payment. It will end with a refunding to you. Income limits for 2019 are updated to $15,570. For Married with no children that files jointly it is $21,370. The threshold increases for each child up to three. If you are claimed as a dependent, you can not claim this credit.
The limits are higher for each child up to three. You cannot claim the credit if someone else claims you as a dependant.

Tax Options For Individuals With Disabilities

The IRS has special provisions for the people with disabilities, No matter if they work or not. The government tries to avoid that federal taxes will unfairly burden those who have the disability impacting their earning potential.

If you are a disabled individual, make sure that you take all the advantages the IRS gives you with the tax deduction and credits and the free help with filing. Keep your documentation like pay stubs and receipts for expenses.

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Disclaimer: John Wolf and paystubmakr.com are making a total effort to offer accurate, competent, ethical HR management, employer, and workplace advice.  We do not use the words of an attorney, and the content on the site is not given as legal advice. The website has readers from all US states, which all have different laws on these topics. The reader should look for legal advice before taking any action.  The information presented on this website is offered as a general guide only.

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