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IRS Tax Filing Rules Offer EITC To Those With Disabilities

Posted by Leslie Ruhland on Jan 29, 2018 2:21:31 PM
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The Internal Revenue Service (IRS) is promoting awareness of the Earned Income Tax Credit (EITC) for taxpayers with disabilities and parents of children with disabilities


They have been actively working to make sure that these taxpayers are aware of the credit and help them to correctly claim it if they qualify.

The IRS and partners nationwide held the annual EITC Awareness Day last Friday on January 26th with the goal of communicating with American workers who may be missing out on this significant tax credit and other refundable credits.

Understanding Earned Income Tax Credit (EITC)

EITC day is a nationwide effort to alert millions of low and moderate-income workers, and others, who may potentially miss out on this significant tax credit.

In addition, IRS is also highlighting other refundable tax credits which include the Child Tax Credit, the Additional Child Tax Credit and the American Opportunity Tax Credit. Those individuals and families with children who are eligible could receive federal and state Earned Income Tax Credits. And this doesn't include other valuable credits, as well. 

The Earned Income Tax Credit is a benefit for working families with low to moderate income. It is a federal income tax credit for workers who earned $53,930 or less in 2017 and meet other eligibility requirements. 

The IRS points out that numbers of those with disabilities miss out on this valuable credit because they don't file tax returns. Yet, the EITC could provide them with a refund of up to $6,318 as an eligible taxpayer. Many people fall below the income threshold requiring them to file and, consequently, don't bother to do so. However, these families and individuals are being encouraged to file anyway because the only way to receive this credit is to file a tax return and claim the EITC. 

Some eligible taxpayers miss out on EITC savings since they had no taxes withheld they think they cannot qualify for tax credits. However, EITC is a refundable tax credit, and this means that even if you had no taxes withheld and you owe no taxes you may still be eligible to get money back. But you must file a tax return.  

You cannot qualify if you do not file. But if you do file, and owe no taxes, you may get a check from the IRS anyway! 

To qualify for EITC, a taxpayer does have to have earned income. Normally, this means income either from a job or from self-employment.


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Disability Retirement Counts as Income

But the IRS wants to remind people that taxpayers who retired on disability can also count as earned income - any taxable benefits they receive under an employer’s disability retirement plan. 

These benefits will remain as "earned income" until the disability retiree reaches minimum retirement age. Keep in mind, though, that Social Security benefits and Social Security Disability Income (SSDI) do not count as earned income. 

Just as importantly, taxpayers can claim a child with a disability, or a relative with a disability of any age, in order to receive the credit if the person meets all other EITC requirements. A great way to determine your eligibility is to use the EITC Assistant, on, which is available in English and Spanish. This tool will help you to determine eligibility and estimate the amount of any credit. 

Quite often, those with disabilities are concerned that a tax refund will impact their eligibility for one or more public disability benefits that they are dependent upon, including Social Security disability, Medicaid, and the Supplemental Nutrition Assistance Program (SNAP).  

However, the law is very clear that tax refunds, including refunds from tax credits such as the EITC, are not counted as income for purposes of determining eligibility for these types of benefits. And this applies to any federal program and any state or local program that is financed with federal funds. 

Once you have determined that you are a qualified taxpayer you should consider claiming the EITC by filing electronically, which you can do: 

  • Through a qualified tax professional. 
  • By using free community tax help sites. 
  • Or yourself, with IRS Free File. 

It is important to know that, by law, the IRS cannot issue refunds before mid-February for tax returns that claim the EITC or the additional child tax credit. The law requires the IRS to hold the entire refund, including any portion not associated with the EITC or ACTC. 

File Early But Don't Expect Refunds Right Away

According to the IRS, the earliest EITC/ACTC related refunds will be available in taxpayer bank accounts, or on debit cards, starting on February 27, 2018. This applies only if these taxpayers choose direct deposit and there are no other issues with their tax return. 

Nonetheless, if you are claiming the EITC or ACTC, it is recommended that you should file as soon as you have all the documents you need to prepare a complete and accurate return. 

The recent tax reform bill, known as The Tax Cuts and Jobs Act of 2017, does not make any direct changes to the EITC. However, in the future, the eligibility tax brackets will be increased based on what is known as the Chained Consumer Price Index (C-CPI) for Urban Consumers. This index grows at a slower rate than the previous inflation measure. As a result, the EITC will now increase more slowly than it would have under the previous tax law. 

For more information on EITC and other refundable tax credits, visit the EITC page on

Get Help With HR Support

An updated and streamlined HR process can help your organization meet its obligations, while providing accuracy and timeliness. In addition, it is important to understand new laws and prioritize accurate record keeping. 

Another key step in maintaining HR compliance and increasing your company's cost-effectiveness is to consider outsourcing HR processes. A professional agency such as Accuchex can provide much-needed help with Human Resources needs and questions.

Accuchex is a full spectrum Payroll Management Services provider offering expertise in Time Management, Insurance and Retirement issues, as well. Call Accuchex Payroll Management Services at 877-422-2824.

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Topics: payroll tax filing, IRS, income tax reporting, disabilities

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