You're paying for equipment, therapy, respite care, and specialized services that most families don't budget for. Some of those expenses qualify for federal tax relief. The question isn't whether you deserve the break, but whether you know which provisions apply to your situation and what documentation you need before tax season.

Here's what families raising children or adults with disabilities can claim, with the thresholds and eligibility rules you need to check before filing.

Medical Expense Deduction: What Qualifies and When

You can deduct unreimbursed medical expenses that exceed 7.5% of your adjusted gross income. If your AGI is $60,000, you'll need more than $4,500 in qualifying expenses before the deduction kicks in. That threshold is high, but families with significant disability-related costs often clear it.

Qualifying expenses include doctor visits, prescription medications, therapies (physical, occupational, speech), medical equipment, and home modifications prescribed by a doctor. Respite care qualifies if it's medically necessary and prescribed as part of a care plan. If you're paying for it so you can work, it belongs under the Child and Dependent Care Credit instead.

Keep receipts, invoices, and letters of medical necessity from providers. The IRS will want documentation if they audit. Don't guess at eligibility: if a cost is medically necessary and you paid out of pocket, it likely qualifies.

Child and Dependent Care Credit: No Age Limit for Disability

The Child and Dependent Care Credit covers work-related care expenses, and here's what most families don't realize: if your dependent is physically or mentally unable to care for themselves, there's no age limit. A 40-year-old adult child who requires supervision qualifies, as long as they lived with you for more than half the year.

For 2026, you can claim up to $3,000 in expenses for one qualifying dependent, or $6,000 for two or more. The credit ranges from 20% to 50% of those expenses based on your AGI. Families with lower income qualify for the higher percentage, up to $1,500 for one dependent or $3,000 for two or more. The credit phases down as income increases, plateauing at 20% for those with AGI exceeding $103,000 ($206,000 for joint filers).

Work-related means you (and your spouse, if married) must be working or looking for work. If you're paying for day programs, in-home care, or respite so you can go to your job, those expenses qualify. Amounts excluded from your income under an employer's dependent care FSA can't be used for this credit because you can't claim the same dollar twice.

Credit for Other Dependents: $500 Per Qualifying Dependent

If your dependent doesn't qualify for the Child Tax Credit, you may still claim the Credit for Other Dependents. This is a $500 non-refundable credit available for dependents of any age who meet the IRS definition of a qualifying dependent.

A disabled child over age 17 doesn't qualify for the Child Tax Credit, but they do qualify for this one. The IRS defines "permanently and totally disabled" as unable to engage in any substantial gainful activity due to a physical or mental condition that has lasted or is expected to last at least 12 months or result in death. You'll need documentation from a physician.

This credit phases out at higher income levels. The IRS provides an online tool to check eligibility if you're near the threshold.

ABLE Accounts: Tax-Advantaged Growth and State Deductions

Contributions to an ABLE account aren't federally tax-deductible, but all investment earnings grow tax-free when withdrawals are used for qualified disability expenses. Qualified expenses include housing, education, healthcare, transportation, employment training and support, assistive technology, and personal support services.

The 2026 annual contribution limit is $20,000. Employed account owners can contribute up to an additional $15,650 under the ABLE to Work provision, bringing the total to $34,064. To qualify for that enhanced limit, the account owner must work and not have contributions to an employer retirement plan like a 401(k).

Saver's Credit for ABLE Contributions

ABLE account owners who work and contribute to their own account from earned income may qualify for the Federal Saver's Tax Credit, up to $2,000 for contributions saved within the account. This credit phases out at higher income levels, but it's a significant benefit for working adults with disabilities who are building savings.

State Tax Deductions Vary

Some states offer income tax deductions for ABLE contributions. Pennsylvania allows a deduction of up to $19,000 per year for contributions to PA ABLE accounts. Iowa taxpayers can deduct up to $6,100 in 2026. Virginia offers up to $2,000 per contributor, per year.

Check with your state tax agency or your ABLE program administrator to confirm whether your state offers a deduction. You may need to contribute to your home state's plan to qualify, as not all states extend the benefit to out-of-state ABLE accounts.

What to Document Before Filing

The IRS doesn't take your word for it. You'll need records.

For medical expenses: receipts, invoices, letters of medical necessity from physicians. If a home modification or piece of equipment is being deducted, keep the prescription or written recommendation from the doctor who ordered it.

For the Child and Dependent Care Credit: the name, address, and taxpayer identification number (Social Security Number or EIN) of each care provider. Track dates of service and amounts paid. If you're using an employer-sponsored dependent care FSA, don't claim the same expenses for both the FSA exclusion and the credit.

For the Credit for Other Dependents: a physician's statement certifying the dependent is permanently and totally disabled. The IRS may request this during an audit.

For ABLE accounts: contribution records and documentation that withdrawals were used for qualified disability expenses. Keep receipts for any purchases you're claiming as qualified expenses.

Frequently Asked Questions

Can I deduct respite care?

Yes, if it's medically necessary and prescribed by a doctor as part of a care plan, it qualifies as a medical expense. If you're paying for it so you can work, claim it under the Child and Dependent Care Credit instead, but not both.

Does SSI or SSDI count as income for tax purposes?

No. Social Security disability benefits (SSI and SSDI) aren't taxable income. They don't increase your AGI and don't affect eligibility for credits and deductions.

Can I claim both the Child and Dependent Care Credit and the medical expense deduction for the same expenses?

No. An expense can only be claimed once. If you're deducting something as a medical expense, you can't also claim it under the dependent care credit.

What if my state doesn't offer an ABLE tax deduction?

You still benefit from federal tax-free growth on ABLE account earnings. State deductions are an added benefit in states that offer them, but the federal tax advantage applies everywhere.

Do I need a special tax preparer?

Not necessarily, but a preparer familiar with disability-related provisions will catch deductions you might miss. If your situation is straightforward (medical expenses, dependent care, standard ABLE contributions), most preparers can handle it. If you're navigating special needs trusts, trust taxation, or complex benefit coordination, find someone with experience in that area.

Can I claim the Saver's Credit if I contribute to my child's ABLE account?

No. The Saver's Credit for ABLE contributions only applies when the account owner contributes from their own earned income. Parent contributions don't qualify for the credit.

What to Bring to Your Tax Preparer

Make a folder with medical receipts, care provider invoices, ABLE contribution statements, and physician letters documenting medical necessity. Include a list of all care providers with their names, addresses, and tax ID numbers. If your dependent is over 17 and permanently disabled, bring the physician's certification.

Your tax preparer can't claim what they don't know about. If you're not sure whether an expense qualifies, bring it anyway. It's easier to exclude something during the appointment than to amend a return later because you left money on the table.