Beyond the B.A.S.I.C.S. Blog

Tax Strategies for Parents of Kids with Special Needs

December 8, 2012


Autism and learning disabilities are considered medical conditions, and are therefore eligible for tax deductions that exceed the standard 7.5% of Adjusted Gross Income. Also, deductions may be submitted retroactively for up to three years.

 As always, consult a professional if you have questions.

Possible Medical Deductions:

-Tuition for special education school (when the primary reason for the special school is totreat the disability).
-Tutoring by someone specially trained to meet the child’s needs
-Regular Education costs, when the purpose of schooling is to treat the disability (ex:
attending a typical preschool for socialization purposes)
– Regular or special education aides
– Speech, OT, PT, and other “special training” costs diagnostic evaluations
-Exercise programs, if recommended by qualified medical personnel to treat a specific condition (ex: yoga, dance, horseback riding, etc)
-Mileage to and from school and therapy sessions ($0.20/mile), parking fees, and airfare for parents and children to obtain treatment or testing
– Diapers
– Specialized equipment used to alleviate illness (car seats, bedding, etc)
– Home improvements, if they exceed any increase in the home’s fair market value, or if they have no effect on the home’s value (no effect improvements include modifying outlets & fixtures)
-Lead Paint Removal, if the child has lead poisoning
– Parent attendance at disability related conferences (but not food & lodging)
– Grocery costs of following a GFCF diet, mileage to and from the health food store, and shipping costs of GF products ordered by mail
-GFCF Diet Deductible Worksheet: http://www.tacanow.org/wp-content/uploads/
2011/02/gfcf-deductions.pdf
-Legal expenses incident to medical care ONLY when the expenses are “necessary
to legitimate a method of medical treatment” (ex: attendance at IEP meetings is not
deductible, but if you have to hire a lawyer to have your IEP implemented, you can deduct that).

Child & Dependent Care Credit
-dependent must be under 13 or require supervision due to a disability & must be
physically or mentally incapable of self-care or require full-time attention for his/her
safety. $3000 per year per dependent.
– Accountants recommend using this credit to cover special schooling costs up to the
maximum amount, then deduct the remaining school costs as medical expenses.

Earned Income Credit
-For families with AGIs under $39,783 and children under age 19 OR children who are full time students through age 23 OR a severely disabled child who lives with his or her parents
-American Opportunity Credit (previously called HOPE credit), Lifetime Learning Credit, and various other Educational Expenses

Further Reading:

  • http://www.autismsupportnetwork.com/news/tax-planning-parents-children-autism-221234/http://www.tacanow.org/family-resources/tax-strategies-for-parents-of-kids-with-special-needs/

    http://www.irs.gov/pub/irs-pdf/p502.pdf/ (Medical deductions)

    http://www.irs.gov/publications/p907/ar02.html/ (deductions for people with disabilities)

    http://www.tacanow.org/wp-content/uploads/2011/02/gfcf-deductions.pdf (GFCF Diet Deduction
    Worksheet)

Melissa Ruiz, BCaBA

BASICS ABA Therapy, LLC

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