What Earned Income Requirements Are Waived for Persons With a Disability?

by Cindy Quarters

Earned income tax credit (EITC), is money that is received in the form of a tax refund. Normally only employed people who meet certain IRS tests can qualify for the EITC, and people who receive money from sources other than employment cannot. In the case of a disabled person, however, there are some exceptions to the rules that will allow a person or the person’s household to receive the earned income tax credit even if he is not working.

Income Sources

Generally speaking, earned income is money that is paid to a person for working. In most cases this means that a person who does not have a job is not eligible for the earned income credit. This is the case even if she has a source of income related to a disability, such as social security disability insurance, military disability or Supplemental Security Income (SSI). For a person receiving these types of income to qualify for the EITC, she must also have a source of earned income.

Disability Retirement Benefits

An exception to the rule requiring a person to work in order to qualify to take the earned income tax credit is if he receives disability retirement payments. The IRS allows these payments to be counted as earned income, and will allow the recipient to qualify for the EITC, even though he is not working. Once the person reaches retirement age, the status of the money changes and the payments are then considered pension income. When that happens, taking the EITC is no longer allowed.

Disabled Child

A disabled child is a person that is related to the person filing taxes who is either physically or mentally unable to work. This person can be the filer’s child, stepchild, adopted child, foster child, sibling, step-sibling, half sibling or a person who is descended from any of these qualifying people. There is no requirement as to the age of a disabled child, and he can be older than the filer, but a doctor must certify that the condition has lasted, or will last for at least one year -- or it is expected to lead to the death of the person. In such a case the person is a qualifying child for EITC purposes.


Even if a person doesn't owe income taxes, if there is a qualifying person with a disability in the household, the forms should be filed anyway. Often a refund resulting from earned income tax credit will be due, even though the disability payments are not taxed and the person is not working. In most cases, the receipt of such a refund will not impact any benefits received by the disabled person or his household.

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