Can I claim a disabled child tax credit for my disabled family member(s)?

Having a child or family member with a disability can add financial responsibilities. Between medical coverage, special education, and other disability-related supports, the cost of caring for someone with a disability can be substantially higher than a non-disabled person.

There’s not a specific tax credit for disabled dependents. However, the Internal Revenue Service (IRS) has special rules when it comes to claiming dependency benefits for disabled family members. To start, there are two types of dependents, a Qualifying Child and a Qualifying Relative. To claim a disabled family member as a Qualifying Child, the person must meet the same tests to qualify as any other dependent. However, if they are permanently and totally disabled, the age requirement doesn’t apply.

And while there is no tax credit specific to disabled dependents, there are tax benefits that can help alleviate the financial burden by offsetting one’s taxable income. You can claim tax credits and deductions on your tax return if you meet the eligibility requirements. 

“What qualifies as a disabled dependent?”

First, let’s outline how the IRS classifies dependents. There two types of dependents: a Qualifying Child and a Qualifying Relative.

Rules for a Qualifying Child

To claim a disabled family member as a Qualifying Child, the person must meet the same tests to qualify as any other child. However, if they are permanently and totally disabled, the age requirement doesn’t apply.

Rules for a Qualifying Relative

To claim your family member as a Qualifying Relative, you must have provided more than one half of their support for the year.

Read the full guidelines for claiming dependents on taxes.

Disability and dependents: IRS rules

As you consider your family’s tax situation, you may wonder, “Can I claim my disabled child as a dependent?” It’s a good, but somewhat complicated question as parents of disabled dependents have many tax nuances to consider.

When claiming a disabled child on your tax return, the disabled person must meet specific eligibility requirements. In fact, the IRS deems a permanent and total disability to be if:

• An individual can’t engage in a substantial gainful activity because of a physical or mental condition.
• A doctor determines an individual condition:
  • Has lasted for at least one year
  • Will last continuously for at least a year
  • Can lead to death

You must be prepared to prove that your child has a permanent and total disability such as by obtaining a letter from their primary healthcare provider or social service program (granting government benefits like SSDI benefits) to verify the qualifying disability.

For other relatives, such as a parent, you may claim them if they meet all of the qualifying relative tests including the support test, whether or not they’re disabled.

Disabled dependent tax credit(s) for parents

Are you looking for a disabled child tax credit to claim? As noted above, there’s no specific credit, but rather multiple applicable tax credits for disabled dependents. Here are some important details.

1. The Child Tax Credit (CTC) is available for parents who meet the income requirements and have a qualifying child, including children with disabilities. Take note that the child needs to be under 17, even if they are disabled to claim the CTC.

2. Parents of a child with a disability may also qualify for the Earned Income Tax Credit (EITC) regardless of the dependent’s age. If the child receives disability benefits, they may still be your qualifying child for the EITC. (See IRS Publication 596 for eligibility rules).

3. If you pay for care for the disabled person you claim as a tax dependent, you may be able to benefit from the Child and Dependent Care Credit. The credit is non-refundable, meaning it can lower your tax bill to zero, but you will not receive any part of it back as a tax refund. It’s worth up to $1,050 for one qualifying dependent, maxing out at $2,100 for two or more qualifying dependents. This tax credit is typically only applicable to children under 13, but this age requirement is lifted for those claiming a disabled child. If you’re claiming a qualifying relative, such as a parent who also happens to be disabled, you can claim this credit if you need to pay someone to care for them while you work. Examples include adult day care and home care providers.

Medical tax deductions for dependents with special needs  

Another valuable tax break for parents or caregivers of disabled dependents relates to medical expenses. You can deduct medical expenses incurred for your disabled dependent if you itemize your deductions. (Learn more about the itemized vs. standard deduction.)

• If you itemize, you can also deduct certain modifications to your home to accommodate a dependent with a disability.
• You can claim the cost of dependent care expenses as long as you don’t use the same expenses on the Child and Dependent Care Credit.
• If your disabled dependent has a service animal, you can deduct the amount spent for care (veterinary appointments, food, boarding, or training).

If you don’t itemize deductions, you might be able to use health savings account (HSA) funds to pay for expenses that are a medical necessity.

Get help navigating your taxes when you have a disabled dependent

Between researching medical coverage, paying for medical bills, and taking your family member to important appointments or schooling. Let us handle the tax aspect of claiming a special needs dependent this tax year.

We’re here to help! Whether you choose to file online or want to file your taxes with a tax professional, we’re here for you.