Disability Tax Credit Information
The 2008 federal disability tax credit allows disabled individuals who retire on permanent disability with tax benefits if their incomes are below the minimum adjusted gross income level as determined by the IRS.
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Qualifying Income
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Disabled adults unable to work due to a lifelong and completely debilitating disability qualify for the credit. Single taxpayers must have adjusted incomes of less than $17,500 or Social Security benefits less than $5,000 annually. Married filers must have adjusted gross incomes of less than $25,000.
Time Frame
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The disability must last at least 12 months or cause death. It must preclude the individual from pursuing substantial gainful activity. Disabled individuals working at qualified sheltered workshops, homebound programs or Department of Veterans Affairs-sponsored shelters may continue working.
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Benefits
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Taxpayers must submit a physician's statement which is provided in Schedule R of the IRS Forms.
The amount of the credit depends upon the adjusted gross income and non-taxable social security benefit amounts. The amount of the credit also depends upon the filing status of the individual. The amount of the credit is capped at the tax liability amount. The IRS offers disabled individuals the choice of using tax worksheets to determine the exact credit amount or free credit computation by tax officials.
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References
Resources
- Photo Credit tax forms image by Chad McDermott from Fotolia.com
