Social Security Disability Stimulus Information

The IRS disability tax credit is limited to permanently disabled adults.

The disability stimulus tax credit gives disabled individuals who are unable to perform work with a credit to reduce their tax bill at tax time. Disabled individuals may qualify for the credit if they are no longer able to work.

Time Frame

Permanent and total disability is defined as the inability to engage in substantial gainful activity as a result of the mental or physical impairment. A substantial gainful activity is defined as gainful employment. If the disability lasts for at least 12 months, then the disability is considered long term.

Considerations

The individual must be leaving work because of a permanent and total disability. The IRS uses very strict income limits based upon the individual's pension or Social Security benefits that are normally not taxable by the IRS.

Effects

Single or head-of-household filers must have an adjusted gross income of less than $17,500 and less than $5,000 in nontaxable benefits. The credit is determined by using an initial amount based upon filing status--$7,500 for single taxpayers and $10,000 for married individuals filing jointly--and adding the nontaxable government benefits. The taxpayer's adjusted gross income is subtracted from the amount of the credit dependent upon the filing status.

References

• Internal Revenue Service: Credit for the Elderly or the Disabled (Publication 524)

Resources

• Lawyers.com: How to Claim the Disability Tax Credit