The IRS does offer deductions for Americans with disabilities.
However, there are times that the benefits are subject to taxation.
Nearly 70 million Americans get additional support from at least one of the programs overseen by the Social Security Administration (SSA). One of the programs they manage is Social Security Disability Insurance (SSDI). Most people know it as disability benefits. Read more about it here.
The payment varies for each person, but is calculated similarly to retirement benefits. The SSA looks at your earnings from 22 until the time you became disabled. The SSA definition of disability is quite rigid.
SSDI payments aren’t usually taxed unless you are getting over $25,000, but most people don’t get that much.
Disability tax benefits
There are various deductions that you can apply for during tax season:
- are legally blind (Publication 501)
- had gross income and disability benefits are not calculated in (Publication 525)
- physical or mental disability that limits employment (Publication 529)
- elderly or disabled (Publication 524)
- medical expenses (Publication 502)
- worked and had an earned income (Publication 596)
Be sure to look into income limits to see how much of your benefit could be taxed 50%. Those with higher incomes could face an 85% tax on their benefit.
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