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By: Sipi Gupta | March 28, 2017

Earned Income Credit

The amount of the parents "earned" income credit may be increased if there are minor or adult special needs children in the household.

The earned income credit allows lower-income taxpayers to take a certain percentage of their earned income as a refundable credit against the income tax. The earned income credit is determined in part by the number of a taxpayer's qualifying children. 

The earned income credit is phased out as a taxpayer's earned income increases. 

The term "qualifying child" is based on the definition under § 152. For purposes of the earned income credit, however, the support limitation does not apply, the family must live in the U.S., and the child cannot be married. Thus, an ...

By: Sipi Gupta | March 19, 2017

Deduction of Medical Expenses

Parents of a minor or adult child with special needs may be able to deduct some of the child's medical expenses, including certain expenses for special education.

A taxpayer is allowed to deduct certain non-reimbursed expenses for medical care of the taxpayer, the taxpayer's spouse, or a dependent, as defined in § 152. The deduction for medical expenses applies to expenses incurred primarily for the prevention or alleviation of a physical or mental defect or illness.

Expenses for a mentally or physically disabled individual to attend a special school may be treated as medical expenses if a principal reason for attending the school is to alleviate the disability. Expenses for ordinary education that is incidental t...

By: Sipi Gupta | March 17, 2017

Taxpayers are allowed deductions for their spouses and their dependents.

Especially pertinent to lower- and middle-income taxpayers, the dependency deduction is allowed regardless of whether a taxpayer itemizes deductions on Schedule A of Form 1040.

By: Sipi Gupta | March 07, 2017

The terms "dependent" and "qualifying child" are key concepts in determining a parent's eligibility for several tax benefits. Under Internal Revenue Code § 152, a dependent is defined as a qualifying child or a qualifying relative. A child is a qualifying child of a parent if:

  • The child lives with the parent for more than one-half of the year;
  • The child meets the applicable age requirement (see below); and
  • The child does not provide over one-half of his or her own support for the year.

Concerning the age requirement, a child is a qualifying child if the child is under age 19 or, if the child is a student, under age 24. Under a special rule, however, a child who is permanently and totally disabled is also considered a qualify...

By: Sipi Gupta | February 26, 2017

Parents of children with special needs typically incur expenses for educating and caring for the child that are not reimbursed by insurance or government programs. 

In the coming weeks, Blogging Away will discuss valuable tax deductions and other benefits that may partially offset some of these non-reimbursed expenses or otherwise reduce the tax burden of parents with special needs children. 

Watch this space to learn about:

- "Qualifying" Child(ren)

-  Deductions for Dependents

- Medical Expense Deductions

- Earned Income Credit