What tax credits are available to disabled adults

If you are a disabled adult, you may reduce the federal income tax you owe through two main credits: the Earned Income Tax Credit (EITC) and the Credit for Other Dependents. The EITC is the larger of the two for most people and does not require you to be on SSDI—it is based on your income and work history. The Credit for Other Dependents applies if someone else claims you as a dependent on their tax return, which happens when a parent or caregiver supports you financially.

These are not deductions that lower your income before tax is calculated. They are credits that reduce the actual tax bill you owe, dollar for dollar. A $500 credit means you pay $500 less in federal tax. Some credits can even result in a refund if the credit is larger than the tax you owe.

You claim these credits on your federal tax return using IRS forms. You do not need to contact Social Security or prove your disability status to the IRS—the IRS does not require medical documentation of disability for these credits.

Key Takeaways

  • The Earned Income Tax Credit reduces your tax bill if you work and earn below a certain income threshold, which varies by filing status and number of dependents.
  • The Credit for Other Dependents is worth up to $500 per person if a parent or caregiver claims you as a dependent because you live with them and they pay for your support.
  • You claim both credits on your federal tax return (Form 1040) using Schedule EIC or Schedule 8812, depending on which credit applies to you.
  • Being on SSDI does not disqualify you from either credit, but your total income and living situation determine whether you meet the requirements.

The Earned Income Tax Credit for disabled workers

The EITC is a refundable credit designed for people with low to moderate earned income. You must have worked during the tax year and earned wages or self-employment income. The credit phases in as your income rises, reaches a maximum amount, then phases out at higher income levels. The exact maximum and income thresholds change each year and depend on your filing status (single, married filing jointly, head of household) and whether you have dependents.

For the 2024 tax year, if you are single with no dependents, the maximum EITC is $600 if your earned income is between roughly $7,000 and $9,100. If you are married filing jointly with no dependents, the range is wider and the credit is larger. If you have one or more may have access to children or dependents, the credit is substantially higher—up to $3,995 for one child, $6,568 for two children, and $6,935 for three or more children. These amounts are set by Congress and change annually.

You do not need to be on SSDI to claim the EITC. You claim it on your federal tax return by completing Schedule EIC and attaching it to Form 1040. If you earned less than the income threshold for your situation, you may receive a refund even if you owe no tax. The IRS processes the credit when it processes your return.

The Credit for Other Dependents when you are claimed as a dependent

If you are a disabled adult and someone else—usually a parent or caregiver—claims you as a dependent on their tax return, that person may claim the Credit for Other Dependents on your behalf. This credit is worth up to $500 per dependent. To be claimed as a dependent, you must live with that person for the entire tax year (with limited exceptions for temporary absences), and they must pay more than half your total support costs for the year.

Support costs include rent or mortgage, food, utilities, medical care, transportation, and other living expenses. If you receive SSDI benefits, those benefits count as your own income and do not count toward the support your parent or caregiver provides. If your parent pays $6,000 of your $10,000 annual support and you contribute $4,000 from SSDI, your parent meets the "more than half" test and can claim you as a dependent.

The person claiming you enters your information on their Form 1040 and Schedule 8812. They do not need to contact you or the IRS to claim the credit—it is claimed on their return, not yours. However, you should know whether you are being claimed, because if you are claimed as a dependent, you cannot claim yourself as an independent on your own return, even if you file one.

How SSDI income affects these credits

SSDI benefits are not counted as earned income for the EITC. If you work part-time and receive SSDI, only your wages count toward the EITC calculation. This is one reason the EITC can be valuable for disabled workers—your SSDI does not reduce the credit.

For the Credit for Other Dependents, SSDI counts as your own income when determining whether someone can claim you as a dependent. If you live with a parent and they pay most of your support, but you receive $1,500 per month in SSDI ($18,000 per year), that $18,000 is your income. Your parent still claims you as a dependent if they pay more than half your remaining support costs. SSDI does not automatically disqualify you from being claimed as a dependent—the test is whether the person claiming you pays more than half your support, not whether you have any income at all.

Income limits and phase-out ranges for 2024

The EITC has different income limits depending on your filing status. For a single filer with no dependents, the credit begins to phase out at $17,600 of earned income and is completely gone at $21,711. For a single filer with one may have access to child, the phase-out begins at $42,492 and ends at $48,756. For married filing jointly with one child, the phase-out begins at $47,492 and ends at $53,756. These ranges are set annually by the IRS and are adjusted for inflation each year.

The Credit for Other Dependents has no income phase-out for most filers, but it does begin to phase out if your modified adjusted gross income exceeds $400,000 (married filing jointly) or $200,000 (single or head of household). For most disabled adults claimed as dependents, this limit is not a factor.

Because these limits change every year, you should check the current year's IRS instructions or use the IRS EITC calculator on irs.gov before filing. The calculator asks you a few questions about your income and situation and tells you whether you likely may have access to and what the estimated credit might be.

How to claim these credits on your tax return

If you work and think you may may have access to for the EITC, you will claim it on your federal tax return using Schedule EIC (Form 1040-A or Form 1040). You list your earned income, filing status, and any may have access to dependents. The IRS calculates the credit based on the income and family information you provide.

If someone claims you as a dependent, they claim the Credit for Other Dependents on their return using Schedule 8812. They enter your name, Social Security number, and relationship to them. You do not file a separate form or contact the IRS yourself—the credit appears on their return.

You can file your return on paper by mailing Form 1040 and the appropriate schedules to the IRS address for your state, or you can file electronically using tax software or a tax preparer. Many tax preparation services and community organizations offer free tax filing help to people with low income. The IRS Free File program offers free software to people earning below a certain threshold—check irs.gov/freefile to see if you may have access to.

What happens if you file jointly with a spouse

If you are married and file a joint return with your spouse, you combine your earned income and calculate the EITC based on your combined situation. If both of you work, both incomes count. If only one of you works, only that person's income counts as earned income for the EITC. The credit is larger for married couples filing jointly than for single filers with the same total income.

If you are married and one spouse is disabled while the other works, the working spouse's income determines whether you may have access to for the EITC. SSDI received by either spouse does not count as earned income. You would file Form 1040 as "Married Filing Jointly" and claim the credit based on your combined earned income and filing status.

Frequently Asked Questions

Can I claim the EITC if I am on SSDI and do not work?

No. The EITC requires earned income from work. SSDI benefits alone do not count as earned income. If you do not work during the tax year, you cannot claim the EITC, even if you are disabled. However, if you work part-time and earn wages, you can claim the EITC based on those wages.

If my parent claims me as a dependent, can I also file my own tax return?

You can file your own return, but you cannot claim yourself as an independent if your parent claims you as a dependent. If your parent claims you, you must check the box on your return that says "someone can claim you as a dependent." You may still file to report your own income and claim the EITC if you work, but the dependent status is determined by your parent's return.

Does the Credit for Other Dependents reduce my parent's income for means-tested programs?

No. Tax credits do not affect your parent's income for purposes of other government programs like SNAP or housing information. The credit is a reduction in what they owe the IRS, not a change to their reported income for other programs.

What if my income changes during the year—do I still may have access to for the EITC?

The EITC is based on your total earned income for the entire tax year. If you earned below the phase-out threshold for your situation, you may have access to, even if your income was uneven month to month. If you earned above the threshold, you do not may have access to. You calculate it once when you file your return for the whole year.

Can I claim the EITC if I am self-employed?

Yes. Self-employment income counts as earned income for the EITC. You report your net self-employment income on Schedule C and use that figure to calculate the credit. You must also pay self-employment tax, which covers Social Security and Medicare.