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Tax Credits: Tax Benefits for People With Disabilities (2025 IRS Guide)

This guide covers “Tax Credits” within tax benefits for people with disabilities. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 907 (2025), Tax Highlights for Persons With Disabilities, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Tax Credits

This discussion highlights four tax credits which may lower your tax due and may be refundable.

Child and Dependent Care Credit

If you pay someone to care for your dependent under age 13 or your spouse or dependent who is not able to care for themselves, 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 themselves and lived with you for more than half the year; or

  3. A person who was not physically or mentally able to care for themselves, 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. They had gross income of $5,200 or more;

      2. They filed a joint return; or

      3. You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2025 return.

You can claim the credit on Form 1040 or 1040-SR. You figure the credit on Form 2441.

For more information, see the instructions for Schedule R (Form 1040).

Credit for the Elderly or the Disabled

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

  • You were 65 or older at the end of 2025.

  • You were under 65 at the end of 2025, and retired on permanent or total disability.

You can claim the credit on Form 1040 or 1040-SR. You figure the credit on Schedule R (Form 1040), Credit for the Elderly or the Disabled.

For more information, see the Instructions for Schedule R (Form 1040).

Earned Income Credit

This credit is for workers with low to moderate incomes who have a qualifying child or meet other qualifications. You can get the credit if your adjusted gross income for 2025 is less than:

  • $19,104 ($26,214 for married filing jointly) if you do not have a qualifying child,

  • $50,434 ($57,554 for married filing jointly) if you have one qualifying child,

  • $57,310 ($64,430 for married filing jointly) if you have two qualifying children, or

  • $61,555 ($68,675 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. If you have a qualifying child, also complete Schedule EIC (Form 1040), Earned Income Credit, and attach it to your Form 1040 or 1040-SR.

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 2025, or permanently and totally disabled at any time during 2025, regardless of age.

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.

More information.

For more information, including all the requirements to claim the earned income credit, see the instructions for Form 1040 or 1040-SR, line 27, and Pub. 596, Earned Income Credit.

Credit for Qualified Retirement Savings Contributions

You may be able to claim the credit for qualified retirement savings contributions (also known as the saver’s credit) of up to $1,000 (up to $2,000 if filing jointly) if you make eligible contributions to your ABLE account. This is a nonrefundable credit, which means the amount of the credit in any year can’t be more than your tax that you would otherwise pay (not counting any refundable credits) for any tax year. If your tax liability is reduced to zero because of other nonrefundable credits, such as the credit for child and dependent care expenses, then you won’t be entitled to this credit.

Can you claim the credit?

If you make eligible contributions to your ABLE account, you can claim the credit if all of the following apply.

  1. You were born before January 2, 2008.

  2. You aren’t a full-time student (explained later).

  3. No one else, such as your parent(s), claims an exemption for you on their tax return.

  4. Your adjusted gross income (defined below) isn’t more than:

    1. $79,000 if your filing status is married filing jointly;

    2. $59,250 if your filing status is head of household; or

    3. $39,500 if your filing status is single, married filing separately, or qualifying surviving spouse.

Full-time student.

You’re a full-time student if, during some part of each of 5 calendar months (not necessarily consecutive) during the calendar year, you’re either:

  • A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance; or

  • A student taking a full-time, on-farm training course given by either a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or a state, county, or local government.

You’re a full-time student if you’re enrolled for the number of hours or courses the school considers to be full time.

Adjusted gross income.

This is generally the amount on your 2025 Form 1040, 1040-SR, or 1040-NR, line 11. However, you must add to that any exclusion or deduction claimed for the year for:

  • Foreign earned income,

  • Income from bona fide residents of American Samoa, and

  • Income from Puerto Rico.

Eligible contributions.

Include on Form 8880 your contributions made before 2026 to your ABLE account, as defined in section 529A, up to the annual contribution limit, to figure the amount, if any, of your retirement savings contributions credit (also known as the saver’s credit).

Reducing eligible contributions.

Reduce your eligible contributions (but not below zero) by the total distributions you received during the testing period from any ABLE account or from any retirement plan. Don’t reduce your eligible contributions by the portion of any distribution that is rolled over to another ABLE account.

Distributions received by spouse.

Any distributions your spouse received are treated as received by you if you file a joint return with your spouse both for the year of the distribution and for the year for which you claim the credit.

Testing period.

The testing period consists of the year for which you claim the credit, the period after the end of that year and before the due date (including extensions) for filing your return for that year, and the 2 tax years before that year.

Maximum eligible contributions.

After your contributions are reduced, the maximum annual contribution on which you can base the credit is $2,000 per person.

Effect on other credits.

The amount of this credit won’t change the amount of your refundable tax credits. A refundable tax credit, such as the earned income credit or the refundable amount of your child tax credit, is an amount that you would receive as a refund even if you don’t owe any taxes.

More information on how to figure and report the credit.

See Form 8880 to determine your credit.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

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