Extra tax credit available for people with disabilities

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The Ithaca Journal

By: Teri Reinemann

February 19, 2010


It's tax time. And, for working people with disabilities, there is something to be happy about. It's called the Earned Income Tax Credit.

EITC is available to low-income workers with and without disabilities. But, for people receiving SSI benefits, there is something you should know. EITC is one of several work incentives created by New York Makes Work Pay to encourage people with disabilities to build assets and save for the future.


Many people with disabilities in New York may be eligible to receive the EITC, but don't know it. EITC is a "refundable credit." This means that you may be eligible for a refund even if your earnings are too small to have any tax liability. For example, if you were single with no children, worked part-time in 2009 and earned less than $13,440 ($18,440 married filing jointly), you may be eligible to receive a refund of up to $457. You also must be at least age 25 and under the age of 65 and have an investment income less than $3,100. And, you must file a return. If you think you might have been eligible for an EITC refund in the past, but did not file a return, you can go back three years.


If all this sounds too good to be true, check with one of the Volunteer Information Tax Sites across the state to see if you qualify. Locally, the Alternatives Federal Credit Union will provide free tax assistance and preparation to eligible families earning less than $49,000 or individuals earning less than $30,000. Call (877) 211-8667 for an appointment.


So, let's say you are a working person with a disability, receive SSI and are eligible for an EITC refund. The first question that probably pops into your mind is: How will this money affect my SSI payments? More good news: claiming the EITC will not affect your eligibility for Medicaid, SSI, SNAP (food stamps), veteran's benefits or federally assisted housing. In other words, EITC refunds do not count as income in the month received. If you are eligible to receive an EITC refund, however, check with your benefit provider (Medicaid, SNAP, veteran's benefits and/or federally subsidized housing) about the rules on resource limits.


For SSI recipients, EITC refunds are excluded from the resource test for nine months following the month received. You may file your refund and have all or part of your refund deposited directly into a checking or savings account or an Individual Development Account. Typically, IDAs are matched savings plans tied to a specific asset development goal and may be used for education or work-related purposes, for example. Check with your bank or credit union with which you normally do business for more information about IDAs. IDAs are a great way to start on the path to savings and self-sufficiency. And, for SSI recipients, the "matched" portion of the IDA will not count as income in the month received. That's all the more reason to see if an IDA is right for you.

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