For most people with disabilities who go back to work, paying taxes is not the first thing that comes to mind, nor the most enjoyable. Depending on your income level and your disability, you may not have to pay taxes, but it is important to file a tax return. In fact, some people actually get additional cash benefits.
What are the organizations I need to be in contact with?
- Working individuals must file both federal (national) and state tax returns.
- For the federal government, the Internal Revenue Service is the tax agency.
- For the state government, the Department of Taxation is the office to contact.
- Plan to get help with your taxes from a tax professional. Free tax help can be found by dialing 211 in Hawaii.
Federal Income Taxes
Individuals with a documented disability may be able to claim a federal tax exemption, depending on his/her income levels. This enables individuals with disabilities to pay less tax, sometimes $0 tax, depending on their income levels.
See Internal Revenue Service documents related to this tax exemption:
- Publication 524, Credit for the Elderly or the Disabled
- Schedule R (Form 1040), Credit for the Elderly or the Disabled
- Schedule R Instructions
- Tax Benefits and Credits, Living and working with Disabilities
- Tax Highlights
It should be noted that individuals with low income may be eligible for the Earned Income Tax Credit, regardless of his/her disability status. This allows people who work but have low incomes to receive a payment from the federal government. Additional information about federal taxes can be found at: www.irs.gov
Accessible IRS Tax Products can be found here.
Hawaii State Taxes
In Hawaii, there are important disability exemptions that can be claimed. See the Hawaii Department of Taxation documents related to this state exemption:
- Hawaii State Tax Form N-172
- Hawaii State Tax Form N-11
- Hawaii State Tax Form N-11 Instructions
- Hawaii State Tax Form G-65
Note that if an individual with a disability qualifies for this state exemption, Hawaii’s Department of Taxation may give special tax benefits for both income and excise tax. Additional information about Hawaii State Taxes can be found at: www.hawaii.gov/tax
For additional resources, click links located on the side of the page.