Tax Credits(p8)

This discussion highlights three tax credits that may be of interest to people with disabilities and those who care for people with disabilities.

If you pay someone to care for either your dependent under age 13 or your spouse or dependent who is not able to care for himself or herself, you may be able to get a credit of up to 35% of your expenses. To qualify, you must pay these expenses so you can work or look for work. The care must be provided for:

1. Your qualifying child who is your dependent and who was under age 13 when the care was provided,
2. Your spouse who was not physically or mentally able to care for himself or herself and lived with you for more than half the year, or
3. A person who was not physically or mentally able to care for himself or herself, lived with you for more than half the year, and either:
   1. Was your dependent, or
   2. Would have been your dependent except that:
      1. He or she received gross income of $3,650 or more,
      2. He or she filed a joint return, or
      3. You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2010 return.

You can claim the credit on Form 1040 or 1040A. You cannot claim the credit on Form 1040EZ or Form 1040NR-EZ. You figure the credit on Form 2441.

For more information, see the instructions for Form 1040, line 48, or Form 1040A, line 29. Publication 503, Child and Dependent Care Expenses, contains more detailed information.

You may be able to claim this credit if you are a citizen or a resident alien and either of the following apply.

1. You were 65 or older at the end of 2010,
2. You were under 65 at the end of 2010, and retired on permanent or total disability.

You can claim the credit on Form 1040 or 1040A. You figure the credit on Schedule R.

For more information, see the instructions for Form 1040, line 53, or Form 1040A, line 30. Publication 524, Credit for the Elderly or the Disabled, contains more detailed information.

This credit is based on the amount of your earned income. You can get the credit if your adjusted gross income for 2010 is less than:

• $13,460 ($18,470 for married filing jointly) if you do not have a qualifying child,
• $35,535 ($40,545 for married filing jointly) if you have one qualifying child,
• $40,363 ($45,373 for married filing jointly) if you have two qualifying children, or
• $43,352 ($48,362 for married filing jointly) if you have three or more qualifying children.

To figure the credit, use the worksheet in the instructions for Form 1040, 1040A, or 1040EZ. If you have a qualifying child, also complete Schedule EIC, Earned Income Credit, and attach it to your Form 1040 or 1040A. You cannot use Form 1040EZ if you have a qualifying child.

To be a qualifying child, your child must be younger than you (or your spouse if married filing jointly) and under age 19 or a full-time student under age 24 at the end of 2010, or permanently and totally disabled at any time during 2010, regardless of age.

If you are retired on disability, benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. However, payments you received from a disability insurance policy that you paid the premiums for are not earned income.

For more information, including all the requirements to claim the earned income credit, see the instructions for Form 1040, line 64a; Form 1040A, line 41a; or Form 1040EZ, line 9a. Publication 596, Earned Income Credit (EIC), contains more detailed information.