II have a question related to disability earned income tax credit — If I’m on disability, do I qualify for the EIC?
Regarding the Earned Income Credit (disability earned income tax credit), Social Security benefits aren’t considered earned income for the Earned Income Credit (EIC). However, other disability payments might qualify depending on both of these:
- The type of disability payments you’re receiving
- If you’ve reached your employer-plan’s minimum retirement age
If you retired on disability, taxable benefits from your employer’s disability retirement plan are earned income. This applies until you reach minimum retirement age. So, you can count that income for EIC purposes.
Your plan defines the minimum retirement age. Starting the day after you reach minimum retirement age, those disability retirement payments are taxed as pension payments. So, they’ll no longer be earned income for EIC purposes. At that point, you must have some other source of earned income to be eligible for EIC.
You might receive payments from a disability insurance policy that you paid premiums for. If so, those payments aren’t earned income for EIC purposes. This applies whether or not you’ve reached the minimum retirement age.
Learn how to deduct student loan interest with H&R Block. Get information about qualified education expenses and see if a student loan tax deduction applies to you.
What’s the difference between an enrolled agent (EA) vs. a certified public accountant (CPA)? Explore the roles of EAs and CPAs at H&R Block.
Looking for virtual tax help with your online filing? Learn more about your options by comparing TurboTax Live to H&R Block Tax Pro Review and Tax Pro Go.
Learn more about earned income credit eligibility and get tax answers at H&R Block.