Living with a disability while raising children in New York can be financially challenging. Many disabled individuals and their families rely on tax credits, like the Child Tax Credit, to help make ends meet. If you receive Social Security Disability Insurance (SSDI) and have dependent children, you may wonder if you still qualify for this valuable credit.
Do people on disability get tax refunds?
Yes, people on disability can still receive tax refunds if they have overpaid their taxes throughout the year or qualify for refundable tax credits. Two necessary credits that can provide significant financial support for disabled individuals and their families are the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC). You can claim these credits even if you owe no taxes, potentially resulting in a refund.
The EITC is a refundable credit designed to help low to moderate-income working individuals and families. The amount of the credit depends on your income, filing status, and the number of children you have.
You can claim the ACTC, a refundable credit if the Child Tax Credit exceeds your tax liability. Even if you owe no taxes, you may still receive money back through the ACTC.
Can a person on disability get the child tax credit?
A person on disability can claim the Child Tax Credit if they meet certain conditions. While the IRS does not consider SSDI benefits as earned income for tax purposes, you may still qualify for the credit if you have other sources of earned income, such as wages from a part-time job or self-employment income. Additionally, if you have taxable income, such as investment income or taxable disability benefits, and your income is below certain thresholds, you may be eligible for the Child Tax Credit.
Your dependent child must also meet the eligibility requirements, including age, relationship, and residency tests to qualify. The child must be under the age of 17 at the end of the tax year and be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them. The child must also have a valid Social Security number and not provide more than half of their support during the tax year.
Furthermore, the child must live with you for more than half of the tax year, although there are some exceptions for temporary absences, such as school or medical treatment. As long as you satisfy these conditions, you can claim the Child Tax Credit on your federal income tax return, even if you are on disability.
What is the child tax credit for disabled people in 2024?
For the 2024 tax year, the Child Tax Credit remains at $2,000 per qualifying child under the age of 17. This credit can provide significant financial relief for disabled individuals and their families. If the credit exceeds your tax liability, you may receive a portion of the excess as a refundable credit, which means you can receive money back even if you owe no taxes.
What is the income limit for the child tax credit in NY?
The income limits for the Child Tax Credit in New York are based on your filing status and adjusted gross income (AGI). For the 2024 tax year, the Child Tax Credit begins to phase out at the following AGI thresholds:
- $200,000 for single filers
- $200,000 for heads of household
- $400,000 for married couples filing jointly
It’s important to note that these income limits apply to the federal Child Tax Credit and may differ from any state-specific child tax credits offered in New York. New York State offers its own Empire State Child Credit, which is a refundable credit of up to 33% of the federal Child Tax Credit or $100 per qualifying child, whichever is greater. The Empire State Child Credit phases out at lower income levels than the federal credit, so it’s crucial to consider both when determining your eligibility and potential benefit.
Seeking Help from Experienced Professionals
If you have questions about your eligibility for the Child Tax Credit or need assistance with your tax return, don’t hesitate to seek the help of a qualified tax professional or disability attorney. They can provide personalized guidance based on your unique circumstances and help you maximize your tax benefits.
The knowledgeable disability attorneys at Fusco, Brandenstein & Rada, P.C. have over 40 years of experience serving New Yorkers with disabilities. Contact them today at 516-496-0400 for a free consultation and take the first step towards securing the financial support your family deserves.