The Oregon Disabled Child Exemption Credit
Understand the qualifications for Oregon's tax credit for a child with a disability, a benefit that directly reduces the state tax owed by qualifying families.
Oregon’s additional personal exemption credit for a child with a disability is a state tax benefit for families caring for a child with a qualifying condition. This nonrefundable credit directly lowers a taxpayer’s final tax liability, offering a dollar-for-dollar reduction of taxes owed. Unlike a deduction, which only reduces taxable income, a credit lowers the actual tax bill. The credit provides a set financial amount for each eligible child and is adjusted annually for inflation.
Eligibility Requirements for the Credit
To claim the credit, the person filing the tax return must be the parent or guardian of the qualifying child. A primary requirement for the taxpayer is that their federal adjusted gross income (AGI) must not exceed $100,000. This income threshold applies to all filing statuses.
The child must qualify as the taxpayer’s dependent under federal tax rules, but there is no specific age limit as long as they meet the dependency tests. The child’s disability status at the close of the tax year must also be formally determined and certified.
A child is considered to have a disability for this credit if they have been determined eligible for early intervention services or special education programs. This determination must be made under the federal Individuals with Disabilities Education Act (IDEA). The diagnosis must confirm conditions such as intellectual disability, hearing or visual impairment, orthopedic impairment, autism, or other health impairments recognized by the State Board of Education.
Required Documentation and Information
Taxpayers must secure and retain specific documentation to substantiate their claim for the credit. The primary evidence is a formal determination of the child’s eligibility for special education or early intervention services. This is typically documented in an Individualized Education Program (IEP) or an Individualized Family Service Plan (IFSP).
The taxpayer is not required to mail these documents with their tax return. Instead, they must keep the IEP or IFSP cover sheet and the eligibility statement with their personal tax records for the year the credit is claimed. The Oregon Department of Revenue may request to see this documentation at a later date to verify the claim.
In addition to the disability certification, taxpayers need the full name of each qualifying child and their valid Social Security Number (SSN). This information is necessary to properly identify the dependent on the tax return.
How to Claim the Credit on Your Tax Return
The process for claiming the credit is done directly on the main Oregon personal income tax return, which could be Form OR-40, Form OR-40-N, or Form OR-40-P. A separate schedule is not required.
In the credits section of the tax form, the filer will find a specific line for this credit. The taxpayer must enter the full name and Social Security Number of each qualifying child in the space provided. The total credit amount is calculated by multiplying the number of eligible children by the per-child credit value.