These 3 tax credits include the child and dependent care credit, the credit for the elderly and the disabled, and the earned income tax credit. Now listen up to this important distinction that I’m about to explain. Unlike a tax deduction, which only reduces your taxable income, a tax credit reduces the amount of tax you have to pay. For example, a $1,000 credit reduces the tax you owe by $1,000. Moreover, you can collect the earned income tax credit even if you owe no tax. But as always, and I can’t stress this enough. You must file a tax return this tax season, in order to claim these credits.

These credits are provided in addition to several deductions, income exclusions, and tax-advantaged accounts for people with disabilities. Therefore, the IRS needs to be able to make the necessary calculations, in order to get you the payment you’re entitled to. But without filing, or following any of these steps, you’ll only hurt yourself in the long run. Because you run the risk of receiving less than you’re entitled or worst case nothing at all. Now one thing to keep in mind, and will help you rest easy at night, is that receiving SSDI or SSI benefits does not prevent you from receiving a tax refund. Let’s hop right into it.

First things first, we are going to get into detail on each tax credit you may be eligible to receive, based on your individual circumstances. The first credit we are going to go over is the Credit for Dependent Care for a Disabled Spouse, Child, or Parent. How do you qualify for this? You may qualify for the child and dependent care credit in one of these three situations: Either,

· You're married and your spouse spends money on your care so that he or she can work.

· You pay for a caregiver for a teenage or adult child who is mentally or physically incapable of self-care so that you can work. Or,

· If your parent is your financial dependent and you pay for a caregiver for your elderly parent so that you can work.

To qualify for this credit, you must pay caregiver expenses for an individual who:

· Is physically or mentally unable to care for himself or herself, and

· lived with the person claiming the credit for more than half the year.

The credit is worth 20%-35% of the caregiver expenses. Qualifying caregiver expenses that are eligible for this credit are those paid to allow a spouse of a disabled person, a parent of a teenage or adult child with disabilities, or an adult child with elderly parents to work or look for work. For example, a caregiver who comes in during the day to look after you so your spouse can work during the day. Qualifying expenses do not include amounts paid for food, lodging, clothing, education, or entertainment for the person needing care. However, they will cover expenses for household services like housekeeping, and they will also qualify if they are at least partly made for the well-being and protection of the disabled person. You cannot however receive a credit for caregiver expenses paid to the following:

· The spouse of a disabled person

· The parent of a disabled child (unless the child is 13 or older)

· A child under the age of 19, or

· A dependent on the tax return of the person claiming the credit.

Moreover, you can receive this credit regardless of how much income you receive. But the amount of the credit is reduced for higher-income taxpayers. In other words, the percentage of the expenses for which you get a credit is dependent on your income. The maximum credit is equal to 35% of up to $3,000 in qualifying caregiver expenses, per child. Therefore, this makes the total maximum credit equal to about $1,050. The minimum credit is 20% of caregiver expenses, or $600 on the maximum of $3,000 of expenses. This credit is not refundable. This means you get it only if you and your spouse, assuming you're married, owe income tax to the IRS.

The next credit we are going to go over is the Credit for the Elderly or the Disabled. This credit is intended for people under the age of 65 who retired from work on permanent and total disability and are receiving taxable disability income from their former employer's accident plan, health plan, or pension plan. The credit can even provide relief to non-disabled people over 65, but in this video ,we specifically address the credit for the disabled. Now to qualify for the credit for the disabled, a doctor must certify that you're unable to perform significant employee job duties or be self-employed because of your physical or mental condition. Unfortunately, most people with disabilities do not qualify for this credit because they have too much income.

Eligibility to receive this credit will depend largely on how much tax you owe versus how much you’re eligible to receive from the IRS based on your income and filing status. Let’s take a look at a couple of examples. If you are single and you receive disability benefits of $417 or more per month, so $5,000 or more per year, you won't qualify for the credit. Or take the scenario where you receive only $300 in SSDI per month, but you have $18,000 in an annual taxable disability pension. You still won't qualify for the credit. So if you do qualify for the credit for the disabled, the amount ranges from $3,750 to $7,500, depending on your filing status and income. And you must complete an IRS form Schedule R in order to figure out the amount of the credit. And this credit is nonrefundable. This means you get it only if you owe income tax to the IRS. For example, if you qualify for a $3,750 credit and owe $4,000 in income tax, you'll have to pay only about $250 in tax. But if you owe no income tax, you get no credit.

Okay last but not least, we have the infamous earned income tax credit. Now if you're disabled and you or your spouse work, you may most likely qualify for the Earned Income Tax Credit. And this credit is available to all low-income workers, not just the disabled. Now to qualify for the EITC, you must:

· Be between 25 and 65 years old

· Not be someone else's dependent or child for EITC purposes

· Live in the United States for at least half the year, and

· Have earned income from working for someone or from running or owning a business—SSI and SSDI payments do not count.

As with the credit for the elderly and disabled, there are income limits for receiving the EITC, but they are not as strict. And the income limit is higher if you have one or more "qualifying children." To be a qualifying child, your child must be under age 19 or a full-time student under age 24 at the end of the tax year or permanently and totally disabled at any time during the year, regardless of age. For the 2021 tax year, you qualify for the EITC if your annual earned income was less than:

· $21,430 (or $27,380 married filing jointly) with no qualifying children

· $51,464 (or $57,414 married filing jointly) with three or more qualifying children.

The IRS has an EITC Assistant tool on its website that you can use to see if you qualify for the credit. If you do qualify, for the 2021 tax year, the maximum amount of the credit ranges from $1,502 for no qualifying children to $6,728 with three qualifying children. The EITC is refundable, which means you get the full credit even if the amount exceeds the income tax you owe, or even if you owe no income tax at all. As always, in order to obtain the EITC, you must file an income tax return and attach Schedule EIC if you have one or more qualifying children. Very important to keep in mind that mentioning any qualifying children will be highly beneficial in boosting your refund as high as possible.

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