Claiming the Child Tax Credit for a Disabled Child

The Child Tax Credit provides a financial benefit to families, aiming to help with the costs of raising children. For families of children with disabilities, specific provisions within the tax code can alter the standard eligibility requirements, potentially making the credit available when it otherwise would not be. These rules recognize the unique financial considerations that can accompany raising a child with significant needs.

Taxpayer Eligibility Rules

A taxpayer’s ability to claim the Child Tax Credit is directly tied to their income. The Internal Revenue Service (IRS) establishes Modified Adjusted Gross Income (MAGI) thresholds that determine if a filer can receive the full credit, a partial amount, or none at all. For the 2025 tax year, the credit begins to phase out for taxpayers with a MAGI above $400,000 on a joint return and above $200,000 for all other filing statuses, such as single or head of household.

This income test is the first step in the eligibility process and applies to the person filing the tax return, not the child. If a taxpayer’s income exceeds these limits, the total credit amount is reduced by $50 for every $1,000 (or fraction thereof) that their MAGI is over the applicable threshold.

It is important for filers to accurately calculate their MAGI to determine where they fall within these phase-out ranges. This figure is calculated by taking the Adjusted Gross Income (AGI) from Form 1040 and adding back certain deductions.

Qualifying Child with a Disability Requirements

For a child to generate the Child Tax Credit, they must first meet a series of standard dependency tests. These include the relationship test, where the child must be a son, daughter, stepchild, foster child, sibling, or a descendant of any of these individuals. The residency test requires the child to have lived with the taxpayer for more than half of the tax year, and the support test mandates that the child could not have provided more than half of their own financial support during that year.

The age test typically requires a child to be under the age of 17 at the end of the tax year to qualify for the Child Tax Credit. However, this is the specific rule that is waived if a child meets the IRS definition of “permanently and totally disabled.” This exception allows a taxpayer to claim the full credit for a qualifying child of any age, acknowledging that the financial dependency of a disabled child often extends beyond their seventeenth birthday.

The IRS defines “permanently and totally disabled” using a strict two-part standard. First, the individual must be unable to engage in any substantial gainful activity because of a physical or mental condition. Substantial gainful activity refers to the performance of significant duties over a reasonable period of time for pay or profit.

Second, a physician must certify that the condition has lasted or can be expected to last continuously for at least one year or that it can lead to death. This medical determination is a required component of the disability qualification.

Calculating the Credit Amount

The value of the Child Tax Credit for the 2025 tax year is up to $2,000 per qualifying child. For a child who meets the criteria for being permanently and totally disabled, the taxpayer is eligible for this full $2,000 amount. This is distinct from the $500 Credit for Other Dependents, which applies to dependents who do not meet the specific qualifications for the Child Tax Credit.

The credit also has a refundable component through the Additional Child Tax Credit (ACTC). While the standard Child Tax Credit is nonrefundable, meaning it can only reduce a taxpayer’s liability to zero, the ACTC can result in a refund. For the 2025 tax year, the refundable portion of the credit is capped at $1,700 per qualifying child.

The calculation for the ACTC is based on the taxpayer’s earned income. Specifically, the credit is calculated as 15% of the taxpayer’s earned income that exceeds $2,500. The refundable amount is the lesser of this calculated figure or the unused portion of the nonrefundable credit, up to the $1,700 maximum. This structure provides a direct financial return to lower-income families, even if they have no tax liability.

How to Claim the Credit on Your Tax Return

Before filing, taxpayers should secure documentation from a medical professional that certifies the child’s permanent and total disability. This typically takes the form of a letter from a doctor detailing the nature of the condition and confirming that it meets the IRS’s durational requirement. This document is not submitted with the tax return but must be kept with the taxpayer’s records as proof in the event the IRS requests it.

The process of claiming the credit begins on Form 1040, the U.S. Individual Income Tax Return, where the child must be listed as a dependent. From there, the taxpayer must complete and attach Schedule 8812, “Credits for Qualifying Children and Other Dependents.” This form is used to calculate the exact amount of the Child Tax Credit and any Additional Child Tax Credit for which the filer is eligible.

On Schedule 8812, there is a specific checkbox that must be marked if the dependent is being claimed as a qualifying child with a disability. This action formally notifies the IRS that the taxpayer is applying the special age exception for a child who is permanently and totally disabled.