If you’re disabled, you may be able to find a benefit at tax time with the Earned Income Tax Credit (EITC). eTax.com can help taxpayers with disabilities and parents who have disabled children determine if they qualify for the EITC.
Disabled taxpayers may worry that taking the EITC and receiving a refund may disqualify them for public benefits such as food stamps, Medicaid, and Social Security Disability benefits. However, tax refunds from credits like the EITC are not used as income when calculating eligibility for public benefits. The same is true of any federal program, as well as state and local programs financed by federal funding.
The IRS reports that nearly 1.5 million disabled taxpayers don’t take this credit, mostly because they do not file a tax return. While many fall below the threshold for income that requires them to file, the IRS recommends that you should still file a return as you may be eligible to receive the EITC.
The main requirement to qualify is that the taxpayer must have earned income, whether from a job or a form of self-employment. If you have retired on disability, you are able to include any taxable benefits you get from your employer’s disability retirement plan into your earned income. This continues until you reach minimum retirement age – until then all benefits are considered earned income.
Social Security benefits or SSDI do not count as earned income, as per the IRS. Also, a parent may claim a disabled child, or another relative with full disability (regardless of their age) to qualify for the EITC, as long as that person meets all other requirements for the credit.
Use our special Earned Income Tax Credit calculator, especially from eTax.com, to help determine your eligibility and estimate the amount of the credit you can get.