Happy New Year! As the 2017 holiday season officially comes to a close, we find ourselves entering the first phase of 2018, which for most of us is tax season! I like to get my taxes done nice and early, so we are knee deep in tax preparations here at the firm. I get a lot of questions regarding taxes as they pertain to state, federal and private disability benefits. Generally speaking, I direct client’s to their tax professionals, however there is one exciting tax credit that I do want to make folks aware of.
If you are a single or married retiree or a disabled person whose federal Social Security benefits make up 90% or more of your income, then you are likely eligible for a wonderful tax credit known as the “Credit for the Elderly or the Disabled”. You must have turned 65 (or be older) by the end of 2017, or have been found disabled by the Social Security Administration before the end of 2017. In addition, there are strict income limits to qualify for this credit that involve calculations concerning your adjusted gross income for 2017 and the total of your nontaxable Social Security benefits, pensions, etc. You must meet both requirements to qualify for the credit.
If you have limited income and think you may qualify for this credit, definitely speak to your tax professional and ask about it. You can claim a maximum of $3,750.00 to $7,500.00 depending upon your filing status, so it is definitely worth checking into. If you do not have a tax professional, you can contact the IRS directly and ask them to calculate the credit for you.
Wishing everyone a seamless and painless tax season!