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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29966
Experience:  Taxes, Immigration, Labor Relations
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M wife was awarded disability, award letter from ss

Customer Question

M wife was awarded disability, award letter from ss in 2014,judge awarded disability back to 2006.SS said she only can be paid from 2010 & on,some years I made less than 25k due to me taking care of her & my daughter,born 2004,blew thru 140k if my savings.Can I go back and get any tax credits or money & how far.She only had enough credits to qualify til 2009 so she gets the minumum of 665,were not doing well financially and my credit is ruined,Now 52 no pension,no retirement,in 05 judge said my wife was to pretty & vicascous to be disabled, no more she ain't.
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

That is a good news as she is awarded.

From tax prospective - the award is received in 2014 - and we need to include the full award amount into her 2014 income.

HOWEVER - because that is award for prior years - the taxable amount may be determined separately for each year starting 2006 and based on income for each of these years separately.

However - the taxable amount (if any) is included in 2014 tax return based on when income was received.

Regarding your tax credits for previous years - yes - if you were eligible for such credits - you may go back and file - but you will be only issued a refund for last three years. That limit is due to the statute of limitation.

Let me know if you need help in determination of your eligibility.

Customer: replied 1 year ago.
How can they institute the statue of limitations when she hadn't been disabled in the courts eyes yet?That seems very unfair
Expert:  Lev replied 1 year ago.

When you applied to disability - and believe she is disabled - most likely you had the statement from the doctor regarding her disability correct?
That statement is accepted by the IRS to claim disability status for tax purposes.
There is no need for the SSA determination or court award to be considered disabled for tax purposes.

Expert:  Lev replied 1 year ago.

According to IRS regulations - a person is permanently and totally disabled if both 1 and 2 below apply.

1. He or she cannot engage in any substantial gainful activity because of a physical or mental condition.
2. A qualified physician determines that the condition has lasted or can be expected to last continuously for at least a year or can be expected to result in death

As we see - there is NO requirements for the SSA determination or court award - you would ONLY need a qualified physician determination.

An example of the physician statement may be found on the last page in following publication

But that statement is NOT sent to the IRS with your tax return. You just keep it for your record and will provide if audited and the IRS agent would question your position.

Let me know if you need any help with reporting.

I am here to help you with all tax related issues.