Potential Tax Benefits for Families with Special Needs

As the April 18, 2016, tax filing deadline quickly approaches there are several considerations Special Needs Families should try and keep in mind this tax season. (April 18th is not a typo – the filing deadline to submit 2015 returns is Monday, April 18, 2016, rather than April 15th, because Washington, D.C., will celebrate Emancipation Day on April 15th). Prior to filing, families should be aware of the possible deductions and credits that they may be eligible. 

•    Medical Therapy and Expenses. Deductible expenses may include: specialized tutoring for the disabled; aids that supplement general education; doctor recommended exercise programs and specialized foods; transportation to and from specialized schools and therapy sessions; home modifications for the disabled, and equipment, devices, and certain supplies necessary to treat or alleviate the disability.

•    Legal Expenses. In most cases, legal expenses for setting up special needs trusts or appealing Medicaid and SSI determinations are tax deductible. 

•    Dependents. After the child reaches the age of 19, you may still be able to deduct him or her as a dependent if he is permanently and totally disabled. Look to Publication 501 for further details. You may also qualify for the Child and Dependent Care Credit if you meet the requirements. Look to Publication 503 for further details. You may further qualify for the Earned Income Tax Credit (EITC) as long as you meet the income requirements. Look to Publication 596 for further details. 

It is important to speak with your tax professional if you’re a Special Needs Family. Caring for a loved one with special needs can take its toll financially, and discussing available tax benefits could help lessen the burden.