Families raising children with special needs are often faced with extra expenses related to therapy, equipment, supplies, schooling and legal fees. With tax deadlines around the corner, there are several deductions and credits applicable to a dependent with a diagnosis of an autism spectrum disorder.
Expenses toward therapy, special diets, medical expenses, legal fees and more are capped at 7.5 percent of a family’s adjust gross income. Certain disability-related payments, such as Supplemental Security Disability Income (SSDI), are not applied toward the gross income.
Tax laws are complex and ever-changing, therefore it is ideal to consult an experienced tax preparer who can ensure families are taking advantage of all benefits available to them.
Medical and therapy benefits
Learning disabilities, such as Attention Deficit Hyperactivity Disorder (ADHD), autism, cerebal palsy and other conditions, qualify as a medical disability. Therefore, several expenses families pay out-of-pocket related to accommodations in school can be deducted. Those can include: private or specialized schooling; tutoring specifically tailored to the child’s disability; one-on-one aides required in the school setting; exercise programs recommended by a medical professional; transportation to and from a specialized or private school; adaptive equipment, such as technology or communication devices.
Special diets and food
Many living with autism adopt a diet free of gluten and casein. If these eliminations are deemed necessary by a medical professional, the additional costs of the specialized foods, above what would be paid for similar items, is deductible. Again, check with a tax professional for detailed information specific to your itemization.
If an attorney is hired to represent your child for legal expenses related to his or her special needs, it may be considered a deduction. Special education cases, proving a child’s medical expenses are necessary, and more legal cases with an attorney may be a legitimate deduction.
A tax deduction is more helpful than a tax credit in that it applies directly to the amount you owe. According to the irs.gov website, the Child and Dependent Care Credit may be applied when a caregiver is paid to care for a dependent with special needs.
This tax credit of up to $3,000 per dependent (up to $6,000 for all dependents) qualifies a dependent who is under age 13 when the care is provided. Such care includes day camps, afterschool programs and child care. The age limit does not apply to older children with special needs.
The Disability and Earned Income Tax Credit can be applied for a qualifying child with a mental or physical disability.
The EITC is available to disabled taxpayers as well as to the parents of a child with a disability. Wrightslaw.com states that if the taxpayer’s child is disabled, the age limitation for the EITC is waived. The EITC has no effect on certain public benefits. Any refund you receive because of the EITC will not be considered income when determining whether you are eligible for benefit programs such as Supplemental Security Income and Medicaid.