Disability and the Earned Income Tax Credit (EITC)


Find out if your disability benefits and the refund you get for the EITC qualify as earned income for the Earned Income Tax Credit (EITC).

Find out how you can claim a child of any age if the person has a total and permanent disability.

If you're unsure if you qualify for the EITC, use the EITC Qualification Assistant.

Disability Benefits and Earned Income Rules

If you get disability payments, your payments may qualify as earned income when you claim the Earned Income Tax Credit (EITC).

Disability payments qualify as earned income depending on:

Disability Retirement Benefits

If you get disability retirement benefits before you reach the minimum retirement age, you must claim the benefits as earned income when you claim the EITC.

To find your minimum retirement age, check your retirement plan. The minimum retirement age is the earliest age you could get disability retirement benefits if you didn’t have the disability.

After you reach the minimum retirement age, your disability retirement payments do not quality as earned income.

Disability Insurance Payments

If you get disability insurance payments, your payments do not qualify as earned income when you claim the EITC if you paid the premiums for the insurance policy. If you got the policy through your employer, your Form W-2 may show the amount you paid in box 12 with code J.

For more information about disability insurance and the EITC, see Life Insurance & Disability Insurance Proceeds.

Other Disability Benefits

Other disability benefits don’t count as earned income when you claim the EITC.  These include:

  • Social Security Disability Insurance
  • Supplemental Security Income (SSI)
  • Military disability pensions

For more information, see Publication 596, Earned Income Credit.

How the EITC Affects Other Government Benefits

If you apply for or get benefits or assistance using a program that uses federal funds, the refund you get when you claim the EITC does not count as income. It can’t be counted as income for at least 12 months after you get it.

To find out if this rule applies to your benefits, check with your benefit coordinator.

Claim a Qualifying Child with a Disability

The qualifying child you claim for the EITC can be any age if they:

  • Have a permanent and total disability and
  • Have a valid Social Security number

If the child gets disability benefits, they may still be your qualifying child for the EITC. Find out more about the additional tests for a qualifying child.

Permanent and Total Disability

A person has a permanent and total disability if both of the following apply:

  • They can’t engage in any substantial gainful activity because of a physical or mental condition and
  • A doctor determines their condition:
    • Has lasted continuously for at least a year or
    • Will last continuously for at least a year or
    • Can lead to death

How to Prove a Permanent and Total Disability

You must prove that your child has a permanent or total disability.

To prove your child's disability, get a letter from their doctor, healthcare provider or any social service program or agency that can verify their disability.

Sheltered Employment and Substantial Gainful Activity

We do not consider sheltered employment “substantial gainful activity.”

Sheltered employment is when a child with a physical or mental disability works for minimal pay under a special program.

If people with physical or mental disabilities work for minimal pay, it must be done at a qualified location. Qualified locations include:

  • Sheltered workshops
  • Hospitals and similar institutions
  • Homebound programs
  • Department of Veterans Affairs (VA) sponsored homes

Additional Resources