Taxes and Disability

Laura Saunders writes at The Wall Street Journal:

More than six million children in the U.S. fall into the "special needs" category, and their ranks are expanding. The number of those affected by one developmental disability alone—autism—grew more than 70% between 2005 and 2010.

The tax code can help—if you know where to look.

There are numerous tax breaks for education, but the most important one for many special-needs students isn't an education break per se. Instead, it falls under the medical-expense category.

Although students with disabilities have a right to a "free and appropriate" public education by law, some families opt out and others pay for a range of supplemental therapies.

Such families can use Uncle Sam's medical-expense deduction for help coping with costs, say experts. But many parents and tax advisers overlook it.

"Parents are busy helping their children, and tax preparers often don't ask about medical expenses unless the taxpayer is old or ill," says Bernard Krooks, a New York attorney who is past president of the Special Needs Alliance, a nonprofit group with members specializing in disability law.

In fact, tax rules allow medical deductions for "diagnosis, cure, mitigation, or treatment…primarily to alleviate or prevent a physical or mental defect or illness" (IRS publication 502).