Updated and reviewed by Meredith H. Greene, Esq., Day Pitney, Co-Chair Special Needs Planning
Jump to what you need:
- Who can I claim as a dependent?
- What tax credits might help my family?
- What about medical deductions and taxes?
- What if I am filing for myself, or if I’m an older caregiver?
- Other things worth knowing
- Learn more
1. Who can I claim as a dependent?
Claiming someone as a dependent can help you get tax benefits. To claim someone, they must meet IRS rules about things like:
- How they are related to you
- Where they live
- Who pays for their support
Key point: If you have a child with a permanent disability, you can claim them at any age — even when they become an adult. This matters if you are still supporting an adult child with a disability.
2. What tax credits might help my family?
A tax credit reduces the amount of tax you owe. If you don’t owe much tax, it may let you get some money back as a refund. Ask your tax professional about these:
Child Tax Credit (CTC)
- Worth up to $2,200 per qualifying child (child must be under 17 at end of 2025)
- You may also get the Additional Child Tax Credit (ACTC) — this is the refundable part, up to $1,700 per child
- Both you and your child need Social Security numbers to qualify
Credit for Other Dependents
- If your dependent doesn’t qualify for the Child Tax Credit (like an older teen or adult child with a disability), you may get a $500 credit
Earned Income Tax Credit (EITC)
- This credit is for families with low to moderate income
- A child who is permanently disabled can qualify at any age. (Other children usually count as dependents as long as they are under 19).
Child and Dependent Care Credit
- Helps pay for someone to care for your person while you work or look for work
- Covers a child under 13, OR a dependent of any age who can’t care for themselves
- Can be worth up to 35% of what you spend on care
Planning tip: A law passed in 2025 means that some families get a bigger credit than they got last year. Ask your tax advisor what this means for you.
Adoption Tax Credit
- If you finalized an adoption in 2025, you may qualify
- Maximum credit: $17,280 per child — and up to $5,000 may be refundable
Saver’s Credit (including ABLE accounts)
- This credit can offset some of the cost of saving money
- A 2025 law made the credit for ABLE account contributions permanent — ask your advisor if this applies to you.
3. What about medical deductions and taxes?
Many disability-related costs may count as medical expenses for your taxes. But there is a catch — this only helps if you itemize deductions instead of taking the standard deduction.
Medical costs families often forget to ask about:
- Health care costs not covered by insurance
- Therapy and evaluations
- Travel to medical and therapy appointments
- Special schooling or training required for medical reasons
- Home changes made for medical needs (like a wheelchair ramp)
- Costs for things you need to do your job because of your disability
Two changes that affect whether it makes sense to itemize:
- The standard deduction is higher in 2025: $31,500 for married couples filing together; $15,750 for single filers. This means fewer people will need to itemize for reasons other than medical expenses.
- The state and local tax (SALT) deduction cap went up: you can now deduct up to $40,000 (with limits at higher incomes).
4. What if I’m filing for myself, or I’m an older caregiver?
If you are an adult with a disability — or an older caregiver — ask your tax advisor about these:
Impairment-Related Work Expenses
- If you have a disability and need to pay for things to do your job, those costs may be deductible as business expenses
- Big benefit: these are not subject to the 7.5% income limit that applies to medical deductions
Credit for the Elderly or Disabled
- This credit is for people 65+ or those retired on disability — ask if it applies to you
New for 2025: Extra Deduction for Seniors
- If you are 65 or older, there is a new extra $6,000 deduction per person
- This is on top of other deductions and may help older caregivers and older adults with disabilities
5. Other things worth knowing:
529 Plans (Education Savings)
- A 2025 law expanded what 529 savings can be used for, including tutoring, educational therapies, and some special needs services
- Ask your advisor what your state allows
ABLE Accounts
- ABLE accounts are special savings accounts for people with disabilities. You can save money for yourself or a family member without affecting your benefits.
- Ask your tax advisor how ABLE contributions and distributions affect your taxes
Health Savings Accounts (HSAs)
- Starting in 2026, there is new flexibility for people using certain direct primary care arrangements — ask if this affects your HSA
Dependent Care FSAs (Flexible Spending Accounts through work)
- The IRS raised the annual limit for 2026 — helpful for families paying for caregiving so they can work
Special Needs Trusts (SNTs)
- SNTs can protect public benefits like Medicaid and SSI, while supporting your family member’s quality of life
- They connect to your tax picture in several ways — ask your advisor how they fit in
Supplemental Security Income (SSI)
- SSI is not taxable. You need to report it when you file your taxes but it is not counted like other income.
*This overview is not intended as tax advice. People with disabilities and their families should consult a tax professional about their specific circumstances.
Learn more:
- SSI and financial resources for families of children with disabilities
- Tax help for people with disabilities (Benefits.gov)
- Living and Working with Disabilities: Tax benefits and credits (IRS)
- IRS Volunteer Income Tax Assistance (VITA) – Local sites offer free tax return preparation to those with low to moderate income. Call 1-800-906-9887 for a VITA site near you, or go to the VITA Locator Tool.
