If you are disabled and cannot work to support yourself or your family, you may qualify for the disability tax credit. The tax deduction will reduce the amount of taxes you owe on any taxable income you receive and may result in a refund, under certain circumstances.
Qualifying for Disability Tax Credit
Especially the first time you claim the deduction, you may want to discuss the option with an attorney or certified tax preparer. Even if you can no longer work, you may not qualify. For example, here are a few things you must consider, in order to legally get this tax break:
• Under the age of 65
• Resident or resident alien of the United States
• Totally disabled
• Receiving disability for your employer or disability income
• Under the mandatory retirement age
• Under the income limitations
If you are over the age of 65, you will no longer qualify for the disability tax credit. But, you may qualify for a credit for the elderly. It’s important to be fully aware of all your options, before filing your taxes. You don’t want to end up paying more taxes than necessary, just because you were unaware of a benefit to claim.
It makes sense that you would need to be a resident of the country, if you want to claim their benefits and tax credits. But, if you have a green card, have been working in America, and you are now totally disabled, you may still qualify for the tax credit.
Some people may unknowingly get themselves in trouble with the IRS, because they claim the tax credit, if they cannot work for a period of time. But, in order to qualify for this tax break, you must be totally disabled and unable to continue employment. Because of a serious illness or injury, your days of working are history.
Naturally, if you want to claim a credit, you need income. Your income must be disability payments from your employer or government agency. In addition, there are limitations to the amounts of tax free income you can receive and still qualify for the disability tax credit.
Calculating your Credit
If you have met all of the requirements for claiming disability credit on your taxes, you still have to figure out how much of a deduction you can claim. Specific formulas are used, in order to determine the proper amount.
Even if you have done your own tax preparations in the past, you may want to consult an attorney or a professional tax preparer. Not only will it prevent you from making a mistake; but, if a mistake is made, the financial penalties should be guaranteed by the company that prepared the taxes.
In short, if you are totally disabled and under the qualifying retirement age, you may qualify for a disability tax credit. If your income and disability benefits are limited, you may save a significant amount on your taxes.