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Taxmap/pubs/p907-002.htm#TXMP2465c26f Tax Credits

Tax Credits

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

Taxmap/pubs/p907-002.htm#TXMP4d211da5 Child and Dependent Care Credit

Child and Dependent Care Credit

Generally, 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.

You can claim the credit on Form 1040 or 1040A. You figure the credit on Form 2441 (Form 1040) or Schedule 2 (Form 1040A).

For more information, see the instructions for Form 1040, line 47 or Form 1040A, line 29. Publication 503, Child and Dependent Care Expenses, contains more detailed information.

Taxmap/pubs/p907-002.htm#TXMP27ebb0ce Credit for the Elderly   or the Disabled

Credit for the Elderly or the Disabled

You may be able to claim this credit if you are 65 or older or if you are under 65 and you retired on permanent and total disability.

You can claim the credit on Form 1040 or 1040A. You figure the credit on Schedule R (Form 1040) or on Schedule 3 (Form 1040A).

For more information, see the instructions for Form 1040, line 48 or Form 1040A, line 30. Publication 524, Credit for the Elderly or the Disabled, contains more detailed information.

Taxmap/pubs/p907-002.htm#TXMP1e297f34 Earned Income Credit

EIC

This credit is based on the amount of your earned income. But you can get the credit only if your earned income for 2004 was less than:

• $11,490 ($12,490 for married filing jointly) and you did not have a qualifying child,
• $30,338 ($31,338 for married filing jointly) and you had one qualifying child, or
• $34,458 ($35,458 for married filing jointly) and you had more than one qualifying child.

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.

Taxmap/pubs/p907-002.htm#TXMP26d12713 Qualifying child.

A qualifying child must be under age 19 at the end of 2004, or a full-time student under age 24 at the end of 2004, or permanently and totally disabled at any time during 2004, regardless of age.

Taxmap/pubs/p907-002.htm#TXMP2100ced4 Earned income.

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.

Taxmap/pubs/p907-002.htm#TXMP658264e4 More information.

For more information, including all the requirements to claim the credit, see the instructions for Form 1040, line 65a, Form 1040A, line 41a, or Form 1040EZ, line 8a. Publication 596, Earned Income Credit (EIC), contains more detailed information.

Previous Page:  Publication 907 - Tax Highlights for Persons With Disabilities - Itemized Deductions Next Page:  Publication 907 - Tax Highlights for Persons With Disabilities - Household Employers Use     to find additional instances of index items.