Can I Claim a Disabled Person on My Taxes?

Navigating tax law can be challenging, particularly when considering how a disability impacts potential deductions and credits. Understanding specific Internal Revenue Service (IRS) guidelines is important for individuals seeking to claim a disabled person on their tax return. This involves evaluating eligibility criteria for dependents and recognizing the distinct definition of disability for tax purposes. The process further requires knowledge of available tax benefits and the necessary documentation to support claims. This article will guide taxpayers through these considerations, providing clarity on how to approach these aspects of tax filing.

Qualifying as a Dependent

Before any disability-specific tax benefits can be considered, the individual must first meet the general IRS rules to qualify as a dependent. The IRS outlines two primary categories for dependents: a “Qualifying Child” or a “Qualifying Relative.” Each category has a distinct set of tests that must be satisfied for a taxpayer to claim someone.

To be a qualifying child, the individual must meet the relationship, age, residency, support, and joint return tests:
The relationship test requires the person to be your son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, step-brother, step-sister, or a descendant of any of them.
For the age test, the child must be under 19 at the end of the tax year, or under 24 if a full-time student, and younger than the taxpayer. There is no age limit if they are permanently and totally disabled.
The residency test dictates that the child must have lived with you for more than half the year, though exceptions exist for temporary absences due to illness, education, or military service.
The support test requires the child not to have provided more than half of their own support for the year.
The joint return test stipulates that the child cannot file a joint return for the year, unless it is filed solely to claim a refund of withheld income tax or estimated tax paid.

If an individual does not meet the criteria for a qualifying child, they might still be claimed as a “Qualifying Relative.” This category also has specific requirements, including not being a qualifying child of any taxpayer. The person’s gross income must be less than a specified amount, which was $5,050 for the 2024 tax year. The taxpayer must have provided more than half of the individual’s total support for the year. Additionally, the person must either live with the taxpayer all year as a member of their household or be related to the taxpayer in one of the specific ways defined by the IRS, such as a parent, grandparent, or sibling. Meeting these foundational dependent criteria is always the initial step before exploring any tax benefits related to disability.

Understanding Disability for Tax Purposes

For tax purposes, the Internal Revenue Service has a specific definition of “disability” that differs from other contexts. An individual is considered to have a “permanent and total disability” if they are unable to engage in any substantial gainful activity due to a physical or mental condition. This condition must be medically determinable and expected to result in death, or have lasted, or be expected to last, for a continuous period of not less than 12 months. Substantial gainful activity refers to performing significant duties for pay or profit, which does not include activities related to ordinary personal or household maintenance.

To substantiate a claim involving a permanent and total disability, the IRS generally requires certification from a qualified physician. This physician’s statement must confirm the nature and expected duration of the condition. While this statement does not typically need to be filed with the tax return, it must be kept as part of the taxpayer’s records for potential verification.

For veterans, a specific form, VA Form 21-0172, “Certification of Permanent and Total Disability,” can be used in place of the physician’s statement if certified by the Department of Veterans Affairs. This form, signed by an authorized VA person, also serves as valid documentation for tax purposes. This precise definition of disability is important because it dictates eligibility for certain tax benefits that are only available to individuals meeting these stringent criteria.

Specific Tax Benefits

Once an individual qualifies as a dependent and meets the IRS’s definition of permanent and total disability, several specific tax benefits may become available. These credits and deductions are designed to help offset the financial burdens associated with supporting a disabled person.

One benefit is the Credit for the Elderly or the Disabled, which can offer financial relief to qualifying individuals. This credit is available to those aged 65 or older, or to individuals under 65 who are retired on permanent and total disability and receive taxable disability income. Income limitations apply, with adjusted gross income (AGI) and nontaxable Social Security benefits falling below specific thresholds, such as an AGI of $17,500 for single filers or $25,000 for married couples filing jointly where both qualify. The credit amount can range from $3,750 to $7,500, depending on filing status and income.

The Medical Expense Deduction allows taxpayers to deduct unreimbursed medical expenses that exceed 7.5% of their adjusted gross income. This deduction is available if the taxpayer itemizes deductions on Schedule A of Form 1040. Qualified medical expenses for a disabled dependent can include a wide range of costs, and payments for long-term care services can also be included, provided they meet specific criteria. These costs include:
Diagnostic services
Treatments
Prescription medications
Specialized medical equipment like wheelchairs or hearing aids
Transportation for medical care

The Child and Dependent Care Credit can apply if care expenses are incurred because the dependent is physically or mentally incapable of self-care. This credit is available when the care allows the taxpayer, and their spouse if filing jointly, to work or look for work. The maximum amount of expenses that can be considered for the credit is $3,000 for one qualifying person and $6,000 for two or more qualifying persons. The credit percentage varies based on the taxpayer’s adjusted gross income, ranging from 20% to 35% of qualified expenses.

Claiming Benefits and Record Keeping

Claiming these specific tax benefits involves completing the appropriate forms and maintaining meticulous records. Understanding the procedural aspects ensures that taxpayers can accurately report their eligibility and maximize any available tax relief.

To claim the Credit for the Elderly or the Disabled, taxpayers typically use Schedule R (Form 1040), where they answer questions about age and disability status. If eligible due to disability, Part II of Schedule R requires a certification that the individual was permanently and totally disabled. For the Medical Expense Deduction, taxpayers must itemize their deductions on Schedule A (Form 1040). The Child and Dependent Care Credit is calculated and claimed on Form 2441, “Child and Dependent Care Expenses,” which is then attached to the main tax return.

Proper record keeping is important for substantiating any claims made on a tax return. Taxpayers should retain all documentation that supports their eligibility for dependent status and disability-related benefits, including physician’s statements certifying permanent and total disability, detailed medical bills and receipts for all qualified expenses, and records of financial support provided to the dependent. Keeping organized records, such as invoices for care services or specialized equipment, ensures that all information is readily available if the IRS requests verification.