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Tax Reform Has an Impact on the Disabled

Posted by Nina Whitehurst | Jan 10, 2018 | 0 Comments

Special needs trust may be answer to new tax reforms.

Some of the people who were concerned about the new tax reform law were people with disabilities, according to The Hillin "Restructured tax code would unduly burden people with disabilities."

However, the concerns raised in that article did not materialize. Not only will they see benefits from the doubling of the standard deduction in the plan, but their taxes might actually decrease due to another provision. The plan includes a provision to make the itemized deduction for health care expenses even better for them for tax years 2017 and 2018. The new tax law lowers the deductibility threshold from 10% to 7.5% of adjusted gross income.

Only in 2019 will the deductibility threshold revert to the former 10% of 2016.

There is something parents and grandparents of the disabled, as well as the disabled themselves, can do and that is create a special needs trust. These trusts do not ease anyone's tax burden but do allow people with special needs to have more income to help cover any increased taxes.

If you would like to learn more about special needs trusts, then talk to an estate planning attorney for the details about setting one up.

Reference: The Hill (Nov. 24, 2017) "Restructured tax code would unduly burden people with disabilities."

About the Author

Nina Whitehurst

Attorney at Law Nina has been practicing law for over 30 years in the areas of estate planning, real estate and business law She is currently licensed in Alaska, Arizona, California, Colorado, Oregon and Tennessee. Her Martindale-Hubbell attorney rating is the highest achievable: 5 stars in peer...


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