Atticus offers free, high-quality disability advice for Americans who can't work. Our team of Stanford and Harvard-trained lawyers has a combined 15+ years of legal experience and has helped over 50,000 Americans apply for disability benefits.
Why trust us?Tax season in 2024 starts on January 29 and if you had income in 2023 you likely need to file a federal tax return by Tax Day on April 15, 2024. (The deadline for Maine and Massachusetts residents is April 17, 2024.)
Even if your only income is from Social Security disability benefits, you may need to pay some taxes. Filing taxes could also allow you to get certain tax credits and potentially a refund, even if you didn’t actually owe taxes to begin with.
To help you with your 2023 taxes we’ve broken down more than a dozen deductions and credits that may help people with disabilities to save some money on their taxes.
If you had income in 2023, you likely need to file a federal tax return by Tax Day. One way to decrease how much tax you owe for the year is through tax credits and deductions, though they each work differently.
A tax deduction decreases your taxable income. The IRS only considers certain kinds of income, known as taxable income.
Most income is taxable, but some is exempt, like SSI payments, workers’ comp settlements, and some short-term disability benefits. If you made $50,000 of taxable income in 2023 but you qualify for $3,000 in tax deductions, the IRS will only tax $47,000 of your income.
The IRS applies the tax rates to your taxable income to find how much tax you actually owe for the year. A tax credit directly decreases how much you owe. If the IRS determines you should have paid $3,000 of income tax in 2023 but you qualify for $2,000 of tax credits, now you only owe $1,000.
There are also two kinds of credits: refundable and nonrefundable. A nonrefundable credit will bring your tax liability to $0 and that’s it. If you owe $1,000 in tax but claim a $1,500 credit, getting a nonrefundable credit means you owe nothing. A refundable credit would give you a $500 refund so that you get the full credit.
Keep in mind that most people pay income taxes throughout the year from their paychecks and most people pay more than they need to, so they get a tax refund anyway.
Taxpayers with disabilities are eligible to claim all the same deductions and credits as other people, but there are some specifically available to those with disabilities. Here are some tax credits and deductions to know:
Below, we give an overview of each tax break. If you have specific questions, your best options are to visit the IRS website or to speak with a tax professional like a certified public accountant (CPA), enrolled agent (EA), or IRS employee.
If you were legally blind or you were 65 or older by the end of 2023, you can receive an additional standard deduction of $1,850. If you’re blind and at least 65 years old, you can receive double the amount ($3,700). Note that you qualify as 65 years old starting on the day before your birthday.
Learn more about your standard deduction amount in IRS Publication 501.
You can qualify for this deduction if you’re at least 65 years old or if you are “permanently and totally disabled.” The disability criteria require having a doctor state that you are unable to do any substantial gainful activity because of a mental or physical health condition.
You can qualify if you’re on SSI or SSDI, but there are restrictive income limits. Anyone on SSDI probably receives too much and many SSI or VA disability benefit recipients will also be ineligible.
Maximum annual income (AGI)
Maximum annual disability benefit
Single, head of household, or surviving spouse
$5,000 ($416.67 per month)
Joint with one qualifying spouse
$5,000 ($416.67 per month)
Joint with two qualifying spouses
$7,500 ($625 per month)
Married filing separately
$3,750 ($312.50 per month)
If you do qualify, the credit for the elderly and disabled is worth between $3,750 and $7,500.
Taxpayers with disabilities can qualify for the earned income credit if they have earned income and it falls within certain limits.
If you have no children, the income limit is $17,640 for single filers and $24,210 for married couples filing jointly. The EITC is worth up to $600 if you have no children.
Someone can also qualify for the EITC if they have a child or adult dependent with disabilities. The income limits increase for each qualifying dependent and the credit is worth significantly more, starting at $3,995 for one dependent and rising to $7,430 if you have three or more.
Read about other situations when you qualify with the IRS’ EITC assistant.
The 2023 child tax credit is available for all parents who meet the income requirements and have a qualifying child, including children with disabilities. The maximum credit is worth up to $2,000 per child. (The expanded credit from 2021 has expired.)
To qualify your child must be under the age of 17 and must have lived with you for more than half of the year. You must also have paid for at least half of their care and your income must be less than $400,000 if you’re married filing jointly, or less than $200,000 if you aren’t filing jointly.
If you qualify for the child tax credit but your credit amount is worth more than the total tax you owe for 2023, then you can qualify for the ACTC.
While the child tax credit isn’t refundable — it can’t reduce your tax bill below $0 — the ACTC allows you to get any excess up to $1,600. Learn more in the IRS instructions for Schedule 8812.
This credit is an option if you can’t claim the child tax credit only because your dependent isn’t your child. For example, someone who cares for an adult sibling or parent with disabilities could claim the ODC.
The credit for other dependents is $500 per eligible dependent.
If you have a child or adult dependent with disabilities, and you spent money to care for them while you actively looked for a job, you deduct some of those costs. Deductible expenses include the cost of a housekeeper, babysitter, cleaner, or other caretaker.
The maximum you can deduct is $3,000 if you have one dependent or $6,000 if you have more than one dependent. There are also income limits, which you can read more about from the IRS.
If you had significant medical or dental expenses in 2023, you may qualify to deduct some of them on your taxes.
However, you can only deduct expenses that are worth more than 7.5% of your adjusted gross income (AGI) and you must itemize deductions.
Since tax changes in 2017, most taxpayers don’t qualify to itemize. You also can’t deduct any expenses that you were reimbursed for. As an example, medical expenses that were paid for or reimbursed by your workers’ compensation wouldn’t qualify.
For a list of common deductible expenses, see Publication 502 from the IRS.
Relieve yourself of paperwork stress. Get help from a lawyer. Get help today.You can qualify for the home office deduction if your home is your primary place of business or if you rent a space specifically to use for work. If you usually go into an office but work from home sometimes, you can’t take this deduction.
You can also only deduct the portion of your expenses that cover the part of home that is your office. So if your office takes up 10% of your home, you can only deduct up to 10% of your home expenses. Examples of deductible expenses include rent, utilities, and repairs.
If you paid for any home improvements that were meant to improve your home’s accessibility, you may qualify to deduct the cost as an itemized deduction. You can qualify whether the changes were made for yourself, a spouse, or a dependent.
According to the IRS, examples of eligible improvements are modified staircases, exit ramps, railings and supports, and widened doorways.
Something as small as new door knobs or hardware on kitchen cabinets can also count. However, changes that increase the value of your home could offset your deduction.
Claim this deduction as part of the medical expense deduction.
If you made out-of-pocket expenses in 2023 to make your work environment more accessible, you may be able to deduct those expenses. The IRS officially calls these impairment-related work expenses.
You can claim this as a miscellaneous deduction, but you need to itemize deductions. Self-employed workers can instead claim it as a business expense.
If you filed an unlawful discrimination claim against the U.S. government and received a settlement or judgment in your favor, you can deduct your lawyer fees and court costs. You don’t need to itemize for this deduction.
See exactly which costs are deductible in IRS Publication 525.
Small businesses can qualify for a few tax credits if they improve the accessibility of their work space.
The disabled access credit is available for improvements in line with the Americans with Disabilities Act of 1990 (ADA).
The work opportunity credit is meant to incentivize companies to hire employees who have mental or physical disabilities.
There’s also the deduction for costs of removing barriers to the disabled and the elderly, which is for businesses that make their facilities easier for people with disabilities or public transportation vehicles to access.
See what benefits you qualify for instantly. Take our easy eligibility quiz.It depends. Some kinds of disability income are taxable, but you generally don’t need to file a return unless your taxable income was more than the 2023 standard deduction — $13,850 for single filers and $27,700 for married couples. But you may still want to file if you qualify for refundable credits like the earned income credit.
You don’t need to pay income tax on SSI benefits or VA disability benefits, but you do need to pay tax on SSDI income if you earn more than a certain amount. Workers’ comp payments aren’t taxable, including settlements.
Yes, you can still claim the child tax credit if you or your spouse receives SSDI, SSI, or VA disability — as long as you meet the other CTC requirements.
No, you can’t deduct money you spend on private disability insurance premiums, except in certain business cases. You also can’t deduct the value of SSDI, SSI, or state disability benefits.
Yes, you can file taxes if you get SSI benefits. And even if you don’t have to file, you may want in order to receive certain tax credits, like the EITC or CTC.
No, there is no ABLE account tax deduction like other retirement plans, but your ABLE contributions can qualify for the retirement saver’s credit. Read more in this IRS guide.
