For the latest information about developments related to Pub. 907, such as legislation enacted after this publication was published, go to IRS.gov/Pub907.
Annual contribution limit. For 2023, the maximum amount that can be contributed to your ABLE account is $17,000. Certain employed ABLE account beneficiaries may contribute a limited additional amount. See Contribution limitation , later.
Retirement savings contributions credit (saver’s credit) income limits increased. For 2023, your modified adjusted gross income must be not more than $36,500 ($73,000 if married filing jointly; $54,750 if head of household). See Credit for Qualified Retirement Savings Contributions , later.
An ABLE account. The Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE) was enacted to help people with disabilities or who are blind save money in a tax-favored ABLE account to maintain health, independence, and quality of life. Compare ABLE programs on the websites of state governments to see which program is best suited for you. See ABLE Account , later.
my Social Security account. Social security beneficiaries can obtain helpful information from the Social Security Administration's website with a my Social Security account. See Social Security and Railroad Retirement Benefits , later.
This publication concerns people with disabilities and those who care for them. It includes highlights about:
You will find most of the information you need to complete your tax return in its instructions.
See How To Get Tax Help at the end of this publication for information about getting publications, forms, and free tax services.
Comments and suggestions.
We welcome your comments about this publication and your suggestions for future editions.
You can send us comments through IRS.gov/FormComments. Or, you can write to the Internal Revenue Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Although we can’t respond individually to each comment received, we do appreciate your feedback and will consider your comments and suggestions as we revise our tax forms, instructions, and publications. Don’t send tax questions, tax returns, or payments to the above address.
Getting answers to your tax questions.
If you have a tax question not answered by this publication or the How To Get Tax Help section at the end of this publication, go to the IRS Interactive Tax Assistant page at IRS.gov/Help/ITA where you can find topics by using the search feature or viewing the categories listed.
Getting tax forms, instructions, and publications.
Go to IRS.gov/Forms to download current and prior-year forms, instructions, and publications.
Ordering tax forms, instructions, and publications.
Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800-829-3676 to order prior-year forms and instructions. The IRS will process your order for forms and publications as soon as possible. Don’t resubmit requests you’ve already sent us. You can get forms and publications faster online.
All income is taxable unless it is specifically excluded by law. The following discussions highlight some taxable and nontaxable income items. For information about distributions from an ABLE account, see ABLE Account , later.
Dependent care benefits include the following.
Exclusion or deduction.
If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. Your employer can tell you whether your benefit plan qualifies. To claim the exclusion, you must complete Part III of Form 2441, Child and Dependent Care Expenses.
If you are self-employed and receive benefits from a qualified dependent care benefit plan, you are treated as both employer and employee. Therefore, you wouldn’t get an exclusion from wages. Instead, you would get a deduction on one of the following Form 1040 or 1040-SR schedules: Schedule C, line 14; Schedule E, line 19 or 28; or Schedule F, line 15. To claim the deduction, you must use Form 2441.
The amount you can exclude or deduct is limited to the smallest of the following.
Statement for employee.
Your employer must give you a Form W-2 (or similar statement) showing in box 10 the total amount of dependent care benefits provided to you during the year under a qualified plan. Your employer will also include any dependent care benefits over $5,000 for 2023 in your wages shown on your Form W-2 in box 1.
Qualifying person(s).
A qualifying person is any of the following.
For information about excluding benefits on Form 1040, Form 1040-SR, or Form 1040-NR, see Form 2441 and its instructions.
my Social Security account.
Social security beneficiaries may quickly and easily obtain the following information from the Social Security Administration's website with a my Social Security account.
For more information and to set up an account, go to SSA.gov/MyAccount.
If you received social security or equivalent tier 1 railroad retirement (RRTA) benefits during the year, part of the amount you received may be taxable.
Are any of your benefits taxable?
If the only income you received during the year was your social security or equivalent tier 1 RRTA benefits, your benefits are generally not taxable.
If you received income during the year in addition to social security or equivalent tier 1 RRTA benefits, part of your benefits may be taxable if all of your other income, including tax-exempt interest, plus half of your benefits are more than:
For more information, see the instructions for Form 1040 or 1040-SR, lines 6a and 6b, and Pub. 915, Social Security and Equivalent Railroad Retirement Benefits.
Supplemental Security Income (SSI) payments.
Social security benefits don’t include SSI payments, which aren’t taxable. Don’t include these payments in your income.
If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. You must report your taxable disability payments as wages on line 1 of Form 1040 or 1040-SR until you reach minimum retirement age. Minimum retirement age is generally the age at which you can first receive a pension or annuity if you aren’t disabled.
. You may be entitled to a tax credit if you were permanently and totally disabled when you retired. See Pub. 524, Credit for the Elderly or the Disabled. .
Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Report the payments on Form 1040 or 1040-SR, lines 5a and 5b. See Pub. 575, Pension and Annuity Income.
Terrorist attacks.
Don’t include in income the disability payments you receive for injuries incurred as a direct result of terrorist attacks directed against the United States (or its allies), whether outside or within the United States. In the case of the September 11 attacks, injuries eligible for coverage by the September 11 Victim Compensation Fund are treated as incurred as a direct result of the attack. However, you must include in your income any amounts that you received that you would have received in retirement had you not become disabled as a result of a terrorist attack. Accordingly, you must include in your income any payments you receive from a 401(k), pension, or other retirement plan to the extent that you would have received the amount at the same or later time regardless of whether you had become disabled.
. Contact the company or agency making these payments if it incorrectly reports your payments as taxable income to the IRS on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to request that it reissue the form to report some or all of these payments as nontaxable income in box 12 (using code J) of Form W-2, or in box 1 of Form 1099-R but not in box 2a. If income taxes are being incorrectly withheld from these payments, you may also submit Form W-4P, Withholding Certificate for Pension or Annuity Payments, to the company or agency to stop the withholding of income taxes from the payments. .
Disability payments you receive for injuries not incurred as a direct result of a terrorist attack, or for illnesses or diseases not resulting from an injury incurred as a direct result of a terrorist attack, cannot be excluded from your income under this provision, but may be excludable for other reasons as described in this publication.
Retirement and profit-sharing plans.
If you receive payments from a retirement or profit-sharing plan that doesn’t provide for disability retirement, don’t treat the payments as a disability pension. The payments must be reported as a pension or annuity.
Accrued leave payment.
If you retire on disability, any lump-sum payment you receive for accrued annual leave is a salary payment. The payment isn’t a disability payment. Include it in your income in the tax year you receive it.
See Pub. 525, Taxable and Nontaxable Income.
Generally, you must report disability pensions as income, but don’t include certain military and government disability pensions. See Pub. 525.
VA disability benefits.
Don’t include disability benefits you receive from the Department of Veterans Affairs (VA) in your gross income. If you are a military retiree and don’t receive your disability benefits from the VA, see Pub. 525 for more information.
Don’t include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the VA. These include:
You may receive other payments that are related to your disability. The following payments aren’t taxable.
Long-term care insurance contracts are generally treated as accident and health insurance contracts. Amounts you receive from them (other than policyholder dividends or premium refunds) are generally excludable from income as amounts received for personal injury or sickness. See Pub. 525.
You can exclude from income accelerated death benefits you receive on the life of an insured individual if certain requirements are met. Accelerated death benefits are amounts received under a life insurance contract before the death of the insured. These benefits also include amounts received on the sale or assignment of the contract to a viatical settlement provider. This exclusion applies only if the insured was a terminally ill individual or a chronically ill individual. See Pub. 525.
If you file Form 1040 or 1040-SR, to lower your taxable income, you can generally claim the standard deduction or itemize your deductions, such as medical expenses, using Schedule A (Form 1040). For impairment-related work expenses, use the appropriate business form (1040 Schedules C, E, and F; or Form 2106, Employee Business Expenses).
When figuring your deduction for medical expenses, you can generally include medical and dental expenses you pay for yourself, your spouse, and your dependents.
Medical expenses are the cost of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. They include the costs of equipment, supplies, diagnostic devices, and transportation for needed medical care and payments for medical insurance.
You can deduct only the amount of your medical and dental expenses that is more than 7.5% of your adjusted gross income shown on Form 1040 or 1040-SR, line 11.
The following list highlights some of the medical expenses you can include in figuring your medical expense deduction.
. Improvements that increase a home's value, if the main purpose is medical care, may be partly included as a medical expense. See Pub. 502, Medical and Dental Expenses. .
If you are disabled, you can take a business deduction for expenses that are necessary for you to be able to work. If you take a business deduction for these impairment-related work expenses, they are not subject to the 7.5% limit that applies to medical expenses.
You are disabled if you have:
Impairment-related expenses defined.
Impairment-related expenses are those ordinary and necessary business expenses that are:
This discussion highlights four tax credits which may lower your tax due and may be refundable.
If you pay someone to care for your dependent under age 13 or your spouse or dependent who is 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 you can work or look for work. The care must be provided for:
You can claim the credit on Form 1040 or 1040-SR. You figure the credit on Form 2441.
For more information, see the instructions for Schedule 3 (Form 1040), line 2, and Pub. 503, Child and Dependent Care Expenses.
You may be able to claim this credit if you are a U.S. citizen or a resident alien and either of the following applies.
You can claim the credit on Form 1040 or 1040-SR. You figure the credit on Schedule R (Form 1040), Credit for the Elderly or the Disabled.
For more information, see the instructions for Schedule 3 (Form 1040), line 6d, and Pub. 524, Credit for the Elderly or the Disabled.
This credit is for workers with low to moderate incomes who have a qualifying child or meet other qualifications. You can get the credit if your adjusted gross income for 2023 is less than:
To figure the credit, use the worksheet in the Instructions for Form 1040. If you have a qualifying child, also complete Schedule EIC (Form 1040), Earned Income Credit, and attach it to your Form 1040 or 1040-SR.
Qualifying child.
To be a qualifying child, your child must be younger than you (or your spouse if married filing jointly) and under age 19 or a full-time student under age 24 at the end of 2023, or permanently and totally disabled at any time during 2023, regardless of age.
Earned income.
If you are retired on disability, benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. However, payments you received from a disability insurance policy that you paid the premiums for are not earned income.
More information.
For more information, including all the requirements to claim the earned income credit, see the instructions for Form 1040 or 1040-SR, line 27, and Pub. 596, Earned Income Credit.
You may be able to claim the credit for qualified retirement savings contributions (also known as the saver’s credit) of up to $1,000 (up to $2,000 if filing jointly) if you make eligible contributions to your ABLE account. This is a nonrefundable credit, which means the amount of the credit in any year can’t be more than your tax that you would otherwise pay (not counting any refundable credits) for any tax year. If your tax liability is reduced to zero because of other nonrefundable credits, such as the credit for child and dependent care expenses, then you won’t be entitled to this credit.
Can you claim the credit?
If you make eligible contributions to your ABLE account, you can claim the credit if all of the following apply.
Full-time student.
You’re a full-time student if, during some part of each of 5 calendar months (not necessarily consecutive) during the calendar year, you’re either:
You’re a full-time student if you’re enrolled for the number of hours or courses the school considers to be full time.
Adjusted gross income.
This is generally the amount on your 2023 Form 1040, 1040-SR, or 1040-NR, line 11. However, you must add to that any exclusion or deduction claimed for the year for:
Eligible contributions.
Include on Form 8880 your contributions made before 2026 to your ABLE account, as defined in section 529A, up to the annual contribution limit, to figure the amount, if any, of your retirement savings contributions credit (also known as the saver’s credit).
Reducing eligible contributions.
Reduce your eligible contributions (but not below zero) by the total distributions you received during the testing period from any ABLE account or from any retirement plan. Don’t reduce your eligible contributions by the portion of any distribution that is rolled over to another ABLE account.
Distributions received by spouse.
Any distributions your spouse received are treated as received by you if you file a joint return with your spouse both for the year of the distribution and for the year for which you claim the credit.
Testing period.
The testing period consists of the year for which you claim the credit, the period after the end of that year and before the due date (including extensions) for filing your return for that year, and the 2 tax years before that year.
Maximum eligible contributions.
After your contributions are reduced, the maximum annual contribution on which you can base the credit is $2,000 per person.
Effect on other credits.
The amount of this credit won’t change the amount of your refundable tax credits. A refundable tax credit, such as the earned income credit or the refundable amount of your child tax credit, is an amount that you would receive as a refund even if you don’t owe any taxes.
More information on how to figure and report the credit.
See Form 8880 to determine your credit.
If you pay someone to work in your home, such as a babysitter or housekeeper, you may be a household employer who has to pay employment taxes.
A person you hire through an agency is not your employee if the agency controls what work is done and how it is done. This control could include setting the fee, requiring regular reports, and providing rules of conduct and appearance. In this case, you do not have to pay employment taxes on the amount you pay. But if you control what work is done and how it is done, the worker is your employee. If you possess the right to discharge a worker, that worker is generally considered to be your employee. If a worker is your employee, it does not matter that you hired the worker through an agency or from a list provided by an agency.
To find out if you have to pay employment taxes, see Pub. 926, Household Employer's Tax Guide.
If you own or operate a business, you should be aware of the following tax incentives for businesses to help persons with disabilities.
Overview.
Compare ABLE programs on the websites of state governments to see which program is best suited for you.
Who can establish an ABLE account and what are the requirements?
You may establish an ABLE account if your blindness or disability occurred before age 26. As a disabled individual, you may be eligible if either of the following applies.
You may choose to have someone else establish an ABLE account for you. If you’re unable to establish an ABLE account, your agent, under a power of attorney, or if none, your conservator or legal guardian, spouse, parent, sibling, grandparent, or a representative payee appointed for you by the Social Security Administration (SSA), in that order, can establish it for you. However, only you, the designated beneficiary, can have any interest in the account during your lifetime.
Loss of eligible individual status.
If you establish an ABLE account and later cease to be an eligible individual because, for example, your impairment goes into remission, then beginning the first day of the next year no contributions may be accepted by your ABLE account. If you cease to be an eligible individual, then for each tax year in which you are not an eligible individual, the account will continue to be an ABLE account, and the ABLE account will not be deemed to be distributed. Contributions may resume after the impairment recurs. You should notify your ABLE program of any changes in your eligibility status.
Distributions from your ABLE account during a period you’re no longer an eligible individual aren’t for qualified disability expenses and therefore are possibly subject to tax. The earnings portion of a distribution (determined under section 72) made from your ABLE account to you when you’re no longer an eligible individual may be taxable.
Example.
In 2023, the taxpayer is an eligible individual with $2,400 in their ABLE account. $2,000 of this is from contributions, and $400 is earnings. During 2023, the taxpayer’s disability goes into remission and they are no longer an eligible individual. In 2024, a distribution of $2,400 is made to the taxpayer from the ABLE account while they aren’t an eligible individual. The earnings portion, $400, is included in the taxpayer’s gross income after the calculation in Table 1.
Contribution limitation.
The total annual contributions to an ABLE account (including amounts rolled over from a section 529 account, but not other amounts received in rollovers and/or program-to-program transfers between ABLE accounts) are limited to the annual gift tax exclusion amount ($17,000 for 2023), plus certain employed ABLE account beneficiaries may make an additional contribution up to the lesser of these amounts: (1) the designated beneficiary’s compensation for the tax year, or (2) the poverty line amount of $13,590 in the continental United States, $15,630 in Hawaii and $16,990 in Alaska. The designated beneficiary’s contribution limit is determined using the poverty guideline applicable in the state of the designated beneficiary’s residence. An employed designated beneficiary isn’t eligible for the increased contribution limit for the tax year if any contribution is made on behalf of the employee to a qualified defined contribution plan (within the meaning of section 414(i)), a section 403(b) plan, or a section 457(b) plan. Also, contributions may not exceed an annual cumulative limit, which is the same as the state’s section 529 qualified tuition program limit.
What if amounts contributed to your ABLE account are greater than the annual contribution limit?
If amounts contributed to your ABLE account are greater than the annual contribution limit, the excess contributions and the earnings on those contributions must be returned to the contributors. The ABLE program should do this on or before the due date (including any extensions) of your income tax return and must notify you of this action. The due date of your income tax return is generally April 15. However, it is your responsibility or the responsibility of the person acting on your behalf to ensure that certain contributions of your compensation income are not greater than the limit and to request the return of any excess contributions by the ABLE program.
You're subject to a 6% excise tax on the excess contributions and earnings that aren't returned by the ABLE program to the contributors by the due date (including any extensions) of your income tax return. You figure this tax on Form 5329, Part VIII, and file it even if you're not otherwise required to file a federal income tax return.
What if your ABLE account exceeds the cumulative limit?
The cumulative limit for an ABLE account is set by each state’s ABLE program. If your ABLE account exceeds the cumulative limit, the state’s ABLE program will return to the contributors the contributions that caused your account to go over the limit, and notify you of this action by the due date (including any extensions) of your income tax return. The due date of your income tax return is generally April 15.
Distributions.
You can take distributions from your ABLE account to pay for any qualified disability expenses, such as expenses for maintaining or improving your health, independence, or quality of life. Qualified disability expenses include those for education, housing, transportation, employment training and support, assistive technology, personal support services, health, prevention and wellness, financial management, administrative services, legal fees, expenses for oversight and monitoring, and funeral and burial expenses.
If distributions from your ABLE account during a year aren't more than your qualified disability expenses for that year, no amount is taxable for that year. If the total amount distributed during a year is more than your qualified disability expenses for that year, the earnings portion of the distribution is included in your income for that year, after the calculation in Table 1.
Table 1. Figuring the Taxable Portion of a Distribution
| The year's total distributions for qualified disability expenses | x | Earnings portion of the year's distributions | = | Amount nontaxable for the year |
| The year's total distributions |
Example.
On August 2, 2023, the taxpayer’s ABLE account has a balance of $2,400; $2,000 is from contributions and $400 is earnings. During 2023, the taxpayer has qualified disability expenses of $1,600, but they receive distributions from their ABLE account totaling $2,400 on August 2, 2023. They figure the nontaxable part of their earnings portion as follows.
| Distributions for qualified disability expenses: $1,600 | x | Earnings portion of the year's distributions: $400 | = | $266.67, the nontaxable portion of the earnings |
| Total distributions: $2,400 |
The tax on any distribution included in your taxable income is increased by 10%. Figure this tax on Form 5329, Part II, and file it even if you're not otherwise required to file a federal income tax return.
Rollovers, program-to-program transfers, and beneficiary changes.
If you need to move your ABLE account to another qualified ABLE program to change the designated beneficiary of the account, you can accomplish this through a rollover. If the ABLE program permits, funds can move from one ABLE account to another through a direct program-to-program transfer.
Rollover.
You don't include in your gross income any amount distributed to you from your ABLE account if it's rolled over within 60 days to another ABLE account established for you or for an eligible family member and no other rollover has been made within the previous 12 months. Eligible family member means a sibling only, whether by blood or by adoption, and includes a brother, sister, stepbrother, stepsister, half brother, and half sister.
Program-to-program transfer.
The entire balance of your ABLE account can be transferred by your ABLE program to another ABLE program. You can also have your ABLE program transfer all or part of the balance in your account to an eligible family member. If the entire balance is transferred, your first ABLE account is closed after the transfer is complete. A program-to-program transfer isn’t a distribution so you don’t include any of the transferred amount in your gross income.
Change of designated beneficiary.
Your ABLE program may permit you to change the beneficiary of your ABLE account from yourself to one of your siblings if your sibling is an eligible individual for the tax year in which you make the change.
Rollover from section 529 tuition account to section 529A ABLE account.
Rollovers may be made without penalty from a section 529 tuition account to a section 529A ABLE account if the beneficiary of the ABLE account is the designated beneficiary of the tuition account or is an eligible member of the family. See Notice 2018-58. The limit on annual contributions to an ABLE account, discussed earlier in Contribution limitation , applies to these rollovers.
Information returns for ABLE accounts.
You may receive from your ABLE program the following forms which you can use if you need to file an income tax return.
Form 1099-QA, Distributions From ABLE Accounts.
An ABLE program issues this form to you to report all distributions made from your ABLE account.
Form 5498-QA, ABLE Account Contribution Information.
An ABLE program issues this form to you annually to report contributions (including rollovers), FMV of the account, opening of a new account, certification of a qualified account, and your disability code.
If you have any questions about the amounts on these forms, you should contact your ABLE program administrator.
If you have questions about a tax issue; need help preparing your tax return; or want to download free publications, forms, or instructions, go to IRS.gov to find resources that can help you right away.
Preparing and filing your tax return.
After receiving all your wage and earnings statements (Forms W-2, W-2G, 1099-R, 1099-MISC, 1099-NEC, etc.); unemployment compensation statements (by mail or in a digital format) or other government payment statements (Form 1099-G); and interest, dividend, and retirement statements from banks and investment firms (Forms 1099), you have several options to choose from to prepare and file your tax return. You can prepare the tax return yourself, see if you qualify for free tax preparation, or hire a tax professional to prepare your return.
Free options for tax preparation.
Your options for preparing and filing your return online or in your local community, if you qualify, include the following.
Using online tools to help prepare your return.
Go to IRS.gov/Tools for the following.
. Getting answers to your tax questions. On IRS.gov, you can get up-to-date information on current events and changes in tax law. .
Need someone to prepare your tax return?
There are various types of tax return preparers, including enrolled agents, certified public accountants (CPAs), accountants, and many others who don’t have professional credentials. If you choose to have someone prepare your tax return, choose that preparer wisely. A paid tax preparer is:
. Although the tax preparer always signs the return, you're ultimately responsible for providing all the information required for the preparer to accurately prepare your return and for the accuracy of every item reported on the return. Anyone paid to prepare tax returns for others should have a thorough understanding of tax matters. For more information on how to choose a tax preparer, go to Tips for Choosing a Tax Preparer on IRS.gov. .
Employers can register to use Business Services Online.
The Social Security Administration (SSA) offers online service at SSA.gov/employer for fast, free, and secure W-2 filing options to CPAs, accountants, enrolled agents, and individuals who process Form W-2, Wage and Tax Statement, and Form W-2c, Corrected Wage and Tax Statement.
IRS social media.
Go to IRS.gov/SocialMedia to see the various social media tools the IRS uses to share the latest information on tax changes, scam alerts, initiatives, products, and services. At the IRS, privacy and security are our highest priority. We use these tools to share public information with you. Don’t post your social security number (SSN) or other confidential information on social media sites. Always protect your identity when using any social networking site.
The following IRS YouTube channels provide short, informative videos on various tax-related topics in English, Spanish, and ASL.
Watching IRS videos.
The IRS Video portal (IRSVideos.gov) contains video and audio presentations for individuals, small businesses, and tax professionals.
Online tax information in other languages.
You can find information on IRS.gov/MyLanguage if English isn’t your native language.
Free Over-the-Phone Interpreter (OPI) Service.
The IRS is committed to serving taxpayers with limited-English proficiency (LEP) by offering OPI services. The OPI Service is a federally funded program and is available at Taxpayer Assistance Centers (TACs), most IRS offices, and every VITA/TCE tax return site. The OPI Service is accessible in more than 350 languages.
Accessibility Helpline available for taxpayers with disabilities.
Taxpayers who need information about accessibility services can call 833-690-0598. The Accessibility Helpline can answer questions related to current and future accessibility products and services available in alternative media formats (for example, braille, large print, audio, etc.). The Accessibility Helpline does not have access to your IRS account. For help with tax law, refunds, or account-related issues, go to IRS.gov/LetUsHelp.
Form 9000, Alternative Media Preference, or Form 9000(SP) allows you to elect to receive certain types of written correspondence in the following formats.