Claiming Your Child as a Dependent:
You may be able to claim your child as a dependent, regardless of age, if they are permanently and totally disabled. They cannot engage in any substantial gainful activity due to physical or mental conditions, and a doctor determines that the condition has lasted or can be expected to last continuously for at least a year or can lead to death.
You may be able to claim an adoption credit and exclude employer-provided adoption benefits from your income if you adopt a child with special needs.
Earned Income Credit:
You may qualify for an Earned Income Credit (EIC) if you work and have earned income under a certain amount, and if your qualifying child is permanently and totally disabled, regardless of age, as long as you meet the other requirements. The credit generally may be claimed by families with both a low to moderate income and children under the age of 19, or up to age 23 for full-time students. However, for permanently and totally disabled adult children living with their parents, the age limit does not apply. You must be able to prove that the child lived with you for more than six months of the year.
Child Care Credit
If you pay for someone to care for your dependent, and if the dependent is under the age of 13 or not able to care for themselves, you may be able to get a credit of up to 35% of your expenses. To qualify, you must pay these expenses so that you can either work or look for work. Child care, after-school programs, and day camps can qualify for the credit.
Most taxpayers do not “itemize” their deductions because the Internal Revenue Service (IRS) allows for a large standard deduction, which is almost always higher than the itemized deductions. However, itemized deductions include non-reimbursed medical expenses you paid personally on behalf of your dependent. To be deductible, a doctor must recommend that the child receive the service.