Disability and Earned Income Tax Credit
Some disability retirement benefits qualify as earned income to claim the Earned Income Tax Credit or EITC. Also, you may claim a relative of any age as a qualifying child if the relative is totally and permanently disabled and fits all other EITC requirements.
What Disability Benefits Qualify as Earned Income for EITC?
IRS considers disability retirement benefits as earned income until you reach minimum retirement age. Minimum retirement age is the earliest age you could have received a pension or annuity if you did not have the disability.
After you reach minimum retirement age, IRS considers the payments your pension and not earned income.
Benefits such as Social Security Disability Insurance, SSI, or military disability pensions are not considered earned income and cannot be used to claim the EITC. You may qualify for the credit only if you,or your spouse, if filing a joint return, have other earned income.