Are You Eligible for the Elderly and Disabled Tax Credit?

Mark Shalloway
Nov 13, 2019 · 2 min read

As the year comes to a close, we start to think about some of the least fun aspects of life: tax season. Before you file your federal income tax return, consider whether or not you are eligible for certain tax credits. Credits can be deducted from federal income tax, while deductions reduce the amount of income subject to tax, making tax credits more beneficial in general.

For certain citizens, they may find they are eligible for the Elderly and Disabled Tax Credit. But how to know if you are eligible?

Credit: GOBankingRates

As is the case with many topics under this umbrella, a qualified individual must be a U.S. citizen or resident (or married to a U.S. citizen/resident ). To qualify for this specific credit, individuals must be 65 or older by the end of the tax year, or under 65 but retired and on permanent and total disability without reaching the “mandatory retirement age” (which is regulated by one’s employer).

To qualify as a disabled taxpayer, the individual must have been permanently and totally disabled and receiving disability income before the end o the tax year. A physician must certify that the taxpayer’s condition has lasted (or will last) continuously for at least a year. They must be unable to partake in “substantial gainful activity” as a result of their condition.

Credit: The Balance

The credit may be unavailable or reduced if it is more than the taxpayer’s tax liability, the taxpayer is claiming credit for a child and dependent care expenses, the initial amount is more than the taxpayer’s taxable disability income, the sum of the non-taxable income and adjusted gross income exceeds the initial credit amount.

The tax law provides an “initial amount” for the credit that varies based on the taxpayer’s filing status. It is subject to deductions for Social Security, other nontaxable payments, and “excess adjusted gross income.” The final sum is multiplied by 15% to determine the individual’s possible credit amount.

As you get your finances in order, consider these factors before the year comes to a close and you lose out on a potential credit.

Mark Shalloway

Written by

Mark Shalloway is an elder and special needs care attorney in West Palm Beach, Florida.

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