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Disability Benefits and the Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC), which is also referred to as EIC, is a tax credit that is meant to help individuals hold on to more of what he or she has earned. It is a refundable federal income tax credit that is particularly for low to moderate income working people and families. A Victorville disability attorney who has practiced in this area for a while will know that the tax credit was originally approved by Congress in the mid-’70s, in part, as a way of offsetting the burden of Social Security taxes and to provide individuals with motivation to work. Whenever someone’s EITC surpasses the amount of taxes owed, it results in a tax refund being given to those who claim and qualify for the credit.

In order to qualify, first, you must meet specific requirements and file a tax return, even if you don’t owe any taxes or are not required to file.¬†You should know that some disability retirement benefits do qualify as earned income that can be claimed as part of the Earned Income Tax Credit. Additionally, you might also be entitled to claim a relative of any age as a qualifying child if that relative is completely and permanently disabled and fits all other EITC requirements.

Note that the IRS considers disability retirement benefits to be earned income until you reach the minimum retirement age. The minimum retirement age is the earliest age that you could have received a pension or annuity had you not had a disability. However, once you reach the minimum retirement age, the IRS will consider the payments to be a pension and not earned income.

A Victorville disability attorney will tell you that benefits, such as Social Security Disability Insurance, SSI, or military disability pensions are not considered earned income and cannot be used to claim the Earned Income Tax Credit (EITC). Keep in mind, though, that you might still be eligible for the credit, but only if you (or your spouse, if filing a joint return) have other earned income.

If you are not currently represented by a Victorville disability attorney, please fill out the form on this page for a free evaluation of your claim.

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