1. TurboTax /
  2. Tax Calculators & Tips /
  3. Tax Tips Guides & Videos /
  4. Disability /
  5. Tax Tips for Caring for a Disabled Spouse

Tax Tips for Caring for a Disabled Spouse

Updated for Tax Year 2017


OVERVIEW

Caring for a disabled spouse can be a financial strain, but you do have opportunities to reduce the burden. There are many tax credits and other tax breaks available for disabled individuals and their caretakers. Among the most common are the Tax Credit for the Elderly or Disabled, the Child or Dependent Care Credit, and the Medical Expenses tax deduction.


Taxable and non-taxable disability

If your spouse is receiving disability payments, it's important for tax planning purposes to understand the source of the payments to help determine whether those benefits are truly taxable. Some examples of taxable and non-taxable benefits include:

tax tips for caring for a disabled spouse

Taxable

  • Disability benefits from an employer, much like wages from that employer
  • Benefits from a disability insurance policy that was paid for by an employer
  • When the cost of a disability policy's premiums is split between an employer and an employee, any benefits attributable to the employer's portion of the premiums or paid using pre-tax dollars
  • Social Security disability income, depending on the amount of ‘other’ income an individual earns

Non-Taxable

  • Benefits from a disability insurance policy that you paid the premiums using after-tax money
  • Veterans disability benefits

Credit for care expenses
If you pay someone to provide care for your disabled spouse, such as a live-in nurse or aide, you might be eligible for the tax credit for child and dependent care expenses. This is the same credit that working parents claim when they pay for child care. Though you cannot actually claim your spouse as a dependent on your tax return, you can treat him or her like one to claim this credit if your situation meets the following conditions:

  • Your spouse is physically or mentally incapable of caring for himself or herself
  • Your spouse lived with you for at least half of the year
  • You paid someone to care for your spouse so that you could work or look for work
  • You had earned income from an employer for services

The amount of your tax credit depends on several factors, including your total earned income, how much you paid for care, and whether you are also paying for child care or care for another dependent. However, unlike many other tax breaks, this one doesn't have an upper income limit. Those with higher-income may get a smaller credit than those who earn a lower-income with the same expenses, but they still get something.

Disability tax credit

People who are unable to work and are receiving disability payments might also qualify for a tax break called the credit for the elderly and disabled. Your spouse could qualify for this credit if all of the following apply:

  • Your spouse retired from his or her job on "permanent and total disability"
  • Your spouse received taxable disability benefits from a former employer or from an insurance policy provided by that employer
  • Your spouse was younger than the employer's mandatory retirement age (if it has one)
  • Your spouse's income was not above certain limits

The term "permanent and total disability" is a disability that meets these criteria:

  • Your spouse cannot work because of his or her condition
  • A doctor has certified that your spouse's condition will last for at least 12 months or is terminal

You claim this credit—and figure out how much your credit is—by filing Schedule R with your tax return. When you use TurboTax, we ask you simple questions and fill in the right forms for you.

Medical expenses deduction

Caring for someone with a disability often means significant ongoing costs, such as for doctor visits, medication, therapy or mobility equipment, or modifications to your home, like a wheelchair ramp. Depending on your situation, you might be able to claim a tax deduction for a portion of your family's medical expenses. Deductions reduce your income, and therefore the amount of tax you owe. The rules for deducting medical expenses are as follows:

  • Your costs must fit the IRS definition of qualifying medical expenses. The definition is fairly broad. IRS Publication 502 provides information on many common expenses.
  • You can deduct only the portion of your expenses that exceed 10% of your income. If you have gross income of $50,000, for example, the first $5,000 of expenses ($50,000 x 10% = $5,000) would not be deductible.
  • You can't deduct any expenses that were reimbursed by an insurance company or someone else

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $59.99$39.99*
Start for Free

Looking for more information?

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.


Security is built into everything we do
Here's how
* Important Offer Details and Disclosures
  • TURBOTAX ONLINE/MOBILE

  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Absolute Zero $0 federal (forms 1040EZ/1040A) + $0 state limited time offer only available with TurboTax Free Edition; offer may change or end at any time without notice. Actual prices are determined at the time of print or e-file and are subject to change without notice. Savings and price comparisons based on anticipated price increase. Special discount offers may not be valid for mobile in-app purchases.
  • QuickBooks Self-Employed Offer with TurboTax Self-Employed: To receive your complimentary subscription to QuickBooks Self-Employed through 4/30/19, you must pay for your 2017 TurboTax Self-Employed return by 4/17/18 and sign-in and access your QuickBooks Self-Employed account via mobile app or at https://selfemployed.intuit.com/turbotax at least twice by 7/15/18. You will have the option of renewing your QuickBooks Self-Employed subscription by 4/30/19 for another year at the then-current subscription rate. You may cancel your subscription at any time from within the QuickBooks Self-Employed billing section. See QuickBooks.com for price comparison. Offer not valid for existing QuickBooks Self-Employed subscribers already on a payment plan.
  • Pays for itself (TurboTax Self-Employed): Estimates based on deductible business expenses calculated at the self-employment tax income rate (15%) for tax year 2017. Actual results will vary based on your tax situation.
  • Anytime, anywhere: Internet access required; standard data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: A $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice.
  • TurboTax Help and Support: Access to a TurboTax specialist is included with TurboTax Deluxe, Premier, Self-Employed and TurboTax Live; not included with Free Edition (but is available as an upgrade). TurboTax specialists are available to provide general customer help and support using the TurboTax product. SmartLook on-screen help is available on a PC, laptop or the TurboTax mobile app. Service, area of expertise, experience levels, wait times, hours of operation and availability vary, and are subject to restriction and change without notice.
  • Tax Advice, Expert Review and TurboTax Live: Access to tax advice and Expert Review (the ability to have a Tax Expert review and/or sign your tax return) is included with TurboTax Live or as an upgrade from another version, and available through October 15, 2018. These services are provided only by credentialed CPAs, EAs or tax attorneys. State tax advice is free. Some tax topics or situations may not be included as part of this service, which shall be determined in the tax expert’s sole discretion. In the event your return is reviewed by a tax expert and requires a significant level of tax advice or actual preparation, the tax expert may be required to sign your return as the preparer at which point they will assume primary responsibility for the preparation of your return. Expert Review [and TurboTax Live] not available on the TurboTax mobile app or when using a web browser on your mobile phone. On-screen help is available on a PC, laptop or the TurboTax mobile app. Service, area of expertise, experience levels, wait times, hours of operation and availability vary, and are subject to restriction and change without notice.
  • Tax Return Access and My Docs features: Included with TurboTax Deluxe, Premier, Self-Employed, TurboTax Live or with PLUS benefits. Access to all tax-related documents we have on file for you is available through 10/31/2019. Terms and conditions may vary and are subject to change without notice.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2016 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.
  • CompleteCheck: Covered under the TurboTax accurate calculations and maximum refund guarantees.
  • #1 rated online tax prep provider: Based on independent comparison of the best online tax software by TopTenReviews.com March 13, 2017.
  • Get tips based on your tax and credit data to help get you to where you want to be: Tax and credit data accessed upon your consent.
  • TURBOTAX CD/DOWNLOAD SOFTWARE

  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal e-file of up to 5 federal tax returns. Additional fees apply for e-filing state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase. Prices subject to change without notice.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: A $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice. This benefit is available with TurboTax Federal products except TurboTax Business.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice via phone is included with Premier and Home & Business; fees apply for Basic and Deluxe customers. State tax advice is free. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2016 TurboTax products.
  • Data Import: Imports financial data from participating companies; may require a free Intuit online account. Quicken and QuickBooks import not available with TurboTax installed on a Mac. Imports from Quicken (2016 and higher) and QuickBooks Desktop (2012 and higher); both Windows only. Quicken import not available for TurboTax Business. Quicken products provided by Quicken Inc., Quicken import subject to change.