Tax Tips for Families with Special Needs

Tax Tips for Families with Special Needs

By Richard L. Sayre, Esq., Spokane, WA

It’s time to begin organizing your tax documents, an exercise that can be particularly confusing when a family member has special needs. Here are some suggestions to bear in mind…

Exemptions and Deductions
When a loved one has special needs, the cost of health care is usually a major concern, so be sure that you claim all the deductions to which you’re entitled.

Tax Credits
Families should also be aware of the following credits:

• Dependent Care – Up to 35 percent of day care expenses incurred while the taxpayer is working or seeking employment.
• Earned Income Tax Credit – For low- to moderate-income families with children under 19 (up to age 23, if children are full-time students). This also applies to adults with disabilities who work.
• Elderly Disabled – For individuals 65 or older who are filing income taxes.
• Disability income from a previous employer’s benefit plan – Eligibility is dependent upon income level.

SNT Income

Perhaps the most important tax decision occurs long before April 15, when a special needs trust (SNT) is first established for a child with disabilities.

Tax planning is clearly a complex matter for families with special needs and regulations may shift from year to year. Obtaining qualified advice can prevent costly mistakes.

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