What Is a Dependent for the Disability Tax Credit?

The federal income tax regulations allow deductions for a disabled dependent's care.

The dependent care benefits tax deduction is available to pay for qualified care to a taxpayer's disabled dependent. The tax deduction is provided after the taxpayer completes return Form 2442, Part III.

Features

The amount the taxpayer's employer provided for the care of the taxpayer's qualifying dependent is the deductible amount. The amount may include the fair market value of a daycare facility or pre-tax contributions amounts paid to a flexible spending account for the care of the dependent while the taxpayer works.

Identification

The amount the taxpayer may exclude is provided in Box 10 of the employer-provided W-2 Form. A qualifying dependent is a disabled spouse who is unable to provide or care for herself due to a mental or physical disability. It may also be a qualified dependent that the taxpayer will claim on the taxpayer's federal returns.

Size

The disabled dependent may have a gross annual income exceeding $3,650. The general tax rule is that any other non-disabled individual who makes more than $3,650 may not be counted as a dependent for filing purposes. The disabled dependent credit is the exception to this general rule.

References

• Internal Revenue Service: Publication 907 (Dependent Care Benefits)

Resources

• Internal Revenue Service: IRS Tax Tips (2010-46)