Tax Facts for Parents of Special Needs Children
Friday, January 14, 2011 at 11:08AM Parents of a disabled or special needs child spend money on that child. It is important to list these expenses throughout the year. The common tax breaks for parents of a special needs child are:
1. Dependent Exemptions. Parents of a permanently and totally disabled child may claim a dependency exemption for the child no matter how old the child is.
2. Medical Deductions. Special needs children often have large medical expenses. Sometimes these medical expenses are large enough to make them deductible on the parent’s tax return. When these medical expenses are more than the standard deduction, the parents can deduct them on their return.
a. Only those family medical expenses which exceed 7.5% of adjusted gross income are deductible. For example, if you make $10,000 per year with $751 in medical expenses, $1 would be deductible.
b. Most taxpayers have these deductions: home mortgage interest, medical expenses, charitable deductions, and personal property tax. When these together are more than the standard deduction, the taxpayer chooses to take the itemized deduction.
c. Items that may be deducted include; private school tuition, tutoring, specialized educational materials like books.
d. Diagnostic evaluations and therapy
e. Necessary transportation expenses.
3. Child Care Credit. Normally, child care credit is available only for care of children under age 13. Credit can be claimed for special needs children who are your dependents and who cannot care for themselves no matter how old they are.
4. Earned Income Credit. The credit may be claimed by parents of special needs children who are otherwise eligible to claim earned income credit no matter how old the children are.
Legal Aid of Arkansas Low-Income Taxpayer Clinic staff members are available to meet with you individually to discuss your tax related questions.
Reader Comments (2)
Is this information I could find on Turbo Tax or where? When I fill out taxes the computer promps tell me what to do next. Thank you for the info any tax savings is appreciated!
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