2017 Publication 907 P907
User Manual: 907
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Department of the Treasury
Internal Revenue Service
Publication 907
Cat. No. 15308H
Tax Highlights
for Persons
With
Disabilities
For use in preparing
2017 Returns
Get forms and other information faster and easier at:
•IRS.gov (English)
•IRS.gov/Spanish (Español)
•IRS.gov/Chinese (中文)
•IRS.gov/Korean (한국어)
•IRS.gov/Russian (Pусский)
•IRS.gov/Vietnamese (TiếngViệt)
Future Developments
For the latest information about developments related to
Pub. 907, such as legislation enacted after this publication
was published, go to IRS.gov/Pub907.
What’s New
Rollovers to ABLE accounts. Rollovers from a section
529 qualified tuition program to a section 529A ABLE
account may be made without penalty under certain
circumstances after December 22, 2017. See ABLE
Account, later.
2018 ABLE account changes on IRS.gov. This
publication is for use in preparing your 2017 returns. For
changes affecting your 2018 return (contribution limit
increase and eligibility for the saver’s credit), go to
IRS.gov/Pub907 for those updates.
Reminders
An ABLE account. The Stephen Beck, Jr., Achieving a
Better Life Experience Act of 2014 (ABLE) was enacted to
help blind or disabled people 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.
Introduction
This publication concerns people with disabilities and
those who care for them. It includes highlights about:
Income,
Itemized deductions,
Tax credits,
Household employers,
Business tax incentives, and
ABLE accounts.
You will find most of the information you need to com-
plete 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 com-
ments about this publication and your suggestions for fu-
ture editions.
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You can send us comments through IRS.gov/
FormComments.
Or you can write to:
Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
Although we cannot respond individually to each com-
ment received, we do appreciate your feedback and will
consider your comments as we revise our tax products.
Ordering forms and publications. Visit IRS.gov/
FormsPubs to download forms and publications. Other-
wise, you can go to IRS.gov/OrderForms to order current
and prior-year forms and instructions. Your order should
arrive within 10 business days.
Tax questions. If you have a tax question not an-
swered by this publication, check IRS.gov and How To
Get Tax Help at the end of this publication.
Income
All income is taxable unless it is specifically excluded by
law. The following discussions highlight some taxable and
nontaxable income items. For information about distribu-
tions from an ABLE account, see ABLE Account, later.
Dependent Care Benefits
Dependent care benefits include the following.
Amounts your employer paid directly to you or your
care provider for the care of your qualifying person(s)
while you worked.
The fair market value of care in a daycare facility pro-
vided or sponsored by your employer.
Pre-tax contributions you made under a dependent
care flexible spending arrangement.
Exclusion or deduction. If your employer provides de-
pendent 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. You cannot
use Form 1040EZ.
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 would not
get an exclusion from wages. Instead, you would get a de-
duction on one of the following Form 1040 schedules:
Schedule C, line 14; Schedule E, line 19 or 28; or Sched-
ule 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.
1. The total amount of dependent care benefits you re-
ceived during the year.
2. The total amount of qualified expenses you incurred
during the year.
3. Your earned income.
4. Your spouse's earned income.
5. $5,000 ($2,500 if married filing separately).
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 in
your wages shown on your Form W-2 in box 1.
Qualifying person(s). A qualifying person is any of
the following.
A qualifying child who is under age 13 whom you can
claim as a dependent. If the child turned 13 during the
year, the child is a qualifying person for the part of the
year he or she was under age 13.
Your disabled spouse who is not physically or men-
tally able to care for themselves.
Any disabled person who was not physically or men-
tally able to care for themselves whom you can claim
as a dependent (or could claim as a dependent ex-
cept that the person had gross income of $4,050 or
more or filed a joint return).
Any disabled person who was not physically or men-
tally able to care for themselves whom you could
claim as a dependent except that you (or your spouse
if filing jointly) could be claimed as a dependent on an-
other taxpayer's 2017 return.
For information about excluding benefits on Form 1040,
Form 1040NR, or Form 1040A, see Form 2441 and its in-
structions.
Social Security and Railroad
Retirement Benefits
My Social Security account. Social security beneficia-
ries may quickly and easily obtain the following informa-
tion from the Social Security Administration's website with
a my Social Security account.
Keep track of your earnings and verify them every
year.
Get an estimate of your future benefits if you are still
working.
Get a letter with proof of your benefits if you currently
receive them.
Change your address.
Start or change your direct deposit.
Get a replacement Medicare card.
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Get a replacement SSA-1099 or SSA-1042S for the
tax season.
For more information and to set up an account, go to
SocialSecurity.gov/MyAccount.
If you received social security or equivalent Tier 1 rail-
road 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 generally
are not taxable.
If you received income during the year in addition to so-
cial security or equivalent Tier 1 RRTA benefits, part of
your benefits may be taxable if all of your other income, in-
cluding tax-exempt interest, plus half of your benefits are
more than:
$25,000 if you are single, head of household, or quali-
fying widow(er);
$25,000 if you are married filing separately and lived
apart from your spouse for all of 2017;
$32,000 if you are married filing jointly; or
$-0- if you are married filing separately and lived with
your spouse at any time during 2017.
For more information, see the instructions for Form
1040, lines 20a and 20b, or Form 1040A, lines 14a and
14b; and Pub. 915, Social Security and Equivalent Rail-
road Retirement Benefits.
Supplemental security income (SSI) payments. So-
cial security benefits do not include SSI payments, which
are not taxable. Do not include these payments in your in-
come.
Disability Pensions
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 7 of Form 1040 or Form
1040A until you reach minimum retirement age. Minimum
retirement age generally is the age at which you can first
receive a pension or annuity if you are not disabled.
You may be entitled to a tax credit if you were per-
manently and totally disabled when you retired.
See Pub. 524, Credit for the Elderly or the Disa-
bled.
Beginning on the day after you reach minimum retire-
ment age, payments you receive are taxable as a pension
or annuity. Report the payments on Form 1040, lines 16a
and 16b; or on Form 1040A, lines 12a and 12b. See Pub.
575, Pension and Annuity Income.
Terrorist attacks. Do not include in your income disabil-
ity 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
TIP
States. 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.
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 on Form W-2,
box 12 (under code J), or Form 1099-R, box 1, but not in
box 2a. If income taxes are being incorrectly withheld from
these payments, you may also submit Form W-4P, With-
holding 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 dis-
eases not resulting from an injury incurred as a direct re-
sult of a terrorist attack, cannot be excluded from your in-
come 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
does not provide for disability retirement, do not 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 is not a disability pay-
ment. Include it in your income in the tax year you receive
it.
See Pub. 525, Taxable and Nontaxable Income.
Military and Government Disability
Pensions
Generally, you must report disability pensions as income,
but do not include certain military and government disabil-
ity pensions. See Pub. 525.
VA disability benefits. Do not include disability benefits
you receive from the Department of Veterans Affairs (VA)
in your gross income. If you are a military retiree and do
not receive your disability benefits from the VA, see Pub.
525 for more information.
Do not include in your income any veterans' benefits
paid under any law, regulation, or administrative practice
administered by the VA. These include:
Education, training, and subsistence allowances;
Disability compensation and pension payments for
disabilities paid to veterans or their families;
Grants for homes designed for wheelchair living;
Grants for motor vehicles for veterans who lost their
sight or the use of their limbs;
TIP
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Veterans' insurance proceeds and dividends paid to
veterans or their beneficiaries, including the proceeds
of a veteran's endowment policy paid before death;
Interest on insurance dividends left on deposit with the
VA;
Benefits under a dependent-care assistance program;
The death gratuity paid to a survivor of a member of
the Armed Forces who died after September 10,
2001; or
Payments made under the VA's compensated work
therapy program.
Other Payments
You may receive other payments that are related to your
disability. The following payments are not taxable.
Benefit payments from a public welfare fund, such as
payments due to blindness.
Workers' compensation for an occupational sickness
or injury if paid under a workers' compensation act or
similar law.
Compensatory (but not punitive) damages for physical
injury or physical sickness.
Disability benefits under a “no-fault” car insurance pol-
icy for loss of income or earning capacity as a result of
injuries.
Compensation for permanent loss or loss of use of a
part or function of your body, or for your permanent
disfigurement.
Long-Term Care Insurance
Long-term care insurance contracts generally are treated
as accident and health insurance contracts. Amounts you
receive from them (other than policyholder dividends or
premium refunds) generally are excludable from income
as amounts received for personal injury or sickness. See
Pub. 525.
Accelerated Death Benefits
You can exclude from income accelerated death benefits
you receive on the life of an insured individual if certain re-
quirements 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 con-
tract to a viatical settlement provider. This exclusion ap-
plies only if the insured was a terminally ill individual or a
chronically ill individual. See Pub. 525.
Itemized Deductions
If you file Form 1040, to lower your taxable income you
generally can claim the standard deduction or itemize
your deductions, such as medical expenses, using
Schedule A (Form 1040). For impairment-related work ex-
penses, use the appropriate business form (1040 Sched-
ules C, C-EZ, E, and F; Form 2106, Employee Business
Expenses; or Form 2106-EZ, Unreimbursed Employee
Business Expenses).
Medical 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, miti-
gation, 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, line 38.
The following list highlights some of the medical expen-
ses you can include in figuring your medical expense de-
duction.
Artificial limbs, contact lenses, eyeglasses, and hear-
ing aids.
The part of the cost of Braille books and magazines
that is more than the price of regular printed editions.
Cost and repair of special telephone equipment for
hearing-impaired persons.
Cost of a wheelchair used mainly for the relief of sick-
ness or disability, and not just to provide transporta-
tion to and from work. The cost of operating and main-
taining the wheelchair is also a medical expense.
Cost and care of a guide dog or other animal aiding a
person with a physical disability.
Costs for a school that furnishes special education if a
principal reason for using the school is its resources
for relieving a mental or physical disability. This in-
cludes the cost of teaching Braille and lip reading and
the cost of remedial language training to correct a
condition caused by a birth defect.
Premiums for qualified long-term care insurance, up to
certain amounts.
Improvements to a home that do not increase its value
if the main purpose is medical care. An example is
constructing entrance or exit ramps.
Improvements that increase a home's value, if the
main purpose is medical care, may be partly in-
cluded as a medical expense. See Pub. 502,
Medical and Dental Expenses.
Impairment-Related Work Expenses
If you are disabled, you can take a business deduction for
expenses that are necessary for you to be able to work. If
TIP
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you take a business deduction for these impairment-rela-
ted work expenses, they are not subject to the 7.5% limit
that applies to medical expenses.
You are disabled if you have:
A physical or mental disability (for example, blindness
or deafness) that functionally limits your being em-
ployed; or
A physical or mental impairment (including, but not
limited to, a sight or hearing impairment) that substan-
tially limits one or more of your major life activities,
such as performing manual tasks, walking, speaking,
breathing, learning, or working.
Impairment-related expenses defined. Impairment-re-
lated expenses are those ordinary and necessary busi-
ness expenses that are:
Necessary for you to do your work satisfactorily;
For goods and services not required or used, other
than incidentally, in your personal activities; and
Not specifically covered under other income tax laws.
See Pub. 502.
Tax Credits
This discussion highlights three tax credits which may
lower your tax due and may be refundable.
Child and Dependent Care Credit
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 expen-
ses so you can work or look for work. The care must be
provided for:
1. Your qualifying child who is your dependent and who
was under age 13 when the care was provided;
2. Your spouse who was not physically or mentally able
to care for themselves and lived with you for more
than half the year; or
3. A person who was not physically or mentally able to
care for themselves, lived with you for more than half
the year, and either:
a. Was your dependent, or
b. Would have been your dependent except that:
i. He or she received gross income of $4,050 or
more,
ii. He or she filed a joint return, or
iii. You, or your spouse if filing jointly, could be
claimed as a dependent on someone else's
2017 return.
You can claim the credit on Form 1040 or 1040A. You
cannot claim the credit on Form 1040EZ or Form
1040NR-EZ. You figure the credit on Form 2441.
For more information, see the instructions for Form
1040, line 49, or Form 1040A, line 31; and Pub. 503, Child
and Dependent Care Expenses.
Credit for the Elderly
or the Disabled
You may be able to claim this credit if you are a U.S. citi-
zen or a resident alien and either of the following applies.
You were 65 or older at the end of 2017.
You were under 65 at the end of 2017, and retired on
permanent or total disability.
You can claim the credit on Form 1040 or 1040A. You
figure the credit on Schedule R, Credit for the Elderly or
the Disabled.
For more information, see the instructions for Form
1040, line 54, or Form 1040A, line 32; and Pub. 524,
Credit for the Elderly or the Disabled.
Earned Income Credit
This credit is for people who work and have a qualifying
child or who meet other qualifications. You can get the
credit if your adjusted gross income for 2017 is less than:
$15,010 ($20,600 for married filing jointly) if you do
not have a qualifying child,
$39,617 ($45,207 for married filing jointly) if you have
one qualifying child,
$45,007 ($50,597 for married filing jointly) if you have
two qualifying children, or
$48,340 ($53,930 for married filing jointly) if you have
three or more qualifying children.
To figure the credit, use the worksheet in the instruc-
tions for Form 1040, 1040A, or 1040EZ. If you have a
qualifying child, also complete Schedule EIC, Earned In-
come Credit, and attach it to your Form 1040 or 1040A.
You cannot use Form 1040EZ if you have a qualifying
child.
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 2017, or permanently and totally disabled
at any time during 2017, 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 mini-
mum retirement age. However, payments you received
from a disability insurance policy that you paid the premi-
ums for are not earned income.
More information. For more information, including all the
requirements to claim the earned income credit, see the
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instructions for Form 1040, line 66a; Form 1040A,
line 42a; Form 1040EZ, line 8a; and Pub. 596, Earned In-
come Credit.
Household Employers
If you pay someone to work in your home, such as a baby-
sitter or housekeeper, you may be a household employer
who has to pay employment taxes.
A person you hire through an agency is not your em-
ployee if the agency controls what work is done and how it
is done. This control could include setting the fee, requir-
ing regular reports, and providing rules of conduct and ap-
pearance. In this case, you do not have to pay employ-
ment taxes on the amount you pay. But if you control what
work is done and how it is done, the worker is your em-
ployee. 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.
Business Tax Incentives
If you own or operate a business, or you are looking for
work, you should be aware of the following tax incentives
for businesses to help persons with disabilities.
Deduction for costs of removing barriers to the
disabled and the elderly—This is a deduction a
business can take for making a facility or public trans-
portation vehicle more accessible to and usable by
persons who are disabled or elderly. See chapter 7 of
Pub. 535, Business Expenses.
Disabled access credit—This is a nonrefundable tax
credit for an eligible small business that pays or incurs
expenses to provide access to persons with disabili-
ties. The expenses must be to enable the eligible
small business to comply with the Americans With
Disabilities Act of 1990. See Form 8826, Disabled Ac-
cess Credit.
Work opportunity credit—This credit provides busi-
nesses with an incentive to hire individuals from targe-
ted groups that have a particularly high unemployment
rate or other special employment needs. One targeted
group consists of vocational rehabilitation referrals.
These are individuals who have a physical or mental
disability that results in a substantial handicap to em-
ployment. See Form 5884, Work Opportunity Credit.
ABLE Account
Overview. Compare ABLE programs on the websites of
state governments to see which program is best suited for
you.
An ABLE account is a tax-favored savings account
that can accept contributions for an eligible blind or
disabled individual who is the designated beneficiary
and owner of the account. The account is used to pro-
vide for qualified disability expenses.
An ABLE account is disregarded for purposes of de-
termining eligibility for benefits under Supplemental
Security Income (SSI) and certain other means-tested
federal programs. For further information, go to
SSA.gov.
A designated beneficiary is limited to only one ABLE
account at a time (for exceptions, see Program-to-pro-
gram transfer and Rollover, later).
Earnings in an ABLE account aren't taxed unless a
distribution exceeds a designated beneficiary’s quali-
fied disability expenses. A designated beneficiary
doesn't include distributions for qualified disability ex-
penses in their income. Qualified disability expenses
include any expenses incurred at a time when the
designated beneficiary is an eligible individual. The
expenses must relate to blindness or disability, includ-
ing expenses for maintaining or improving health, in-
dependence, or quality of life.
Contributions to an ABLE account are not tax deducti-
ble and must be in cash or cash equivalents. Anyone,
including the designated beneficiary, can contribute to
an ABLE account. An ABLE account is subject to an
annual contribution limit and a cumulative balance
limit.
Upon your death, as a designated beneficiary, any
state may file a claim (either with the person with sig-
nature authority over your ABLE account or the execu-
tor of your estate) for the amount of the total medical
assistance paid to you under the state's Medicaid plan
after you (or a person with authority to open an ABLE
account on your behalf) established an ABLE ac-
count. The amount paid in satisfaction of such a claim
is not a taxable distribution from your ABLE account.
Further, this amount is paid to the state only after all
your qualified disability expenses have been paid from
your ABLE account and the amount paid to satisfy the
state's claim is reduced by the amount of all premiums
you paid to a Medicaid Buy-In program under that
state's Medicaid plan.
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 fol-
lowing applies.
You are entitled to benefits based on blindness or dis-
ability under Title II or XVI of the Social Security Act.
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You file a disability certification with your qualified
ABLE program, including your diagnosis relating to
your relevant impairment or impairments signed by a
physician (as defined in section 1861(r) of the Social
Security Act). You must certify one of the following.
▶ You have a medically determinable physical or
mental impairment which results in marked and se-
vere functional limitations, which (a) can be expected
to result in death, or (b) lasted or can be expected to
last for a continuous period of not less than 12
months.
▶ You are blind within the meaning of section 1614(a)
(2) of the Social Security Act.
If you’re unable to establish an ABLE account, your
agent, under a power of attorney, or if none, your parent or
legal guardian can establish it for you. But only you, the
designated beneficiary, can have any interest in the ac-
count 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 remis-
sion, then beginning the first day of the next year no con-
tributions 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 sta-
tus.
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 un-
der section 72) made from your ABLE account to you
when you’re no longer an eligible individual may be taxa-
ble.
Example. In 2017, Adam is an eligible individual with
$2,400 in his ABLE account. $2,000 of this is from contri-
butions, and $400 is earnings. During 2017, Adam’s disa-
bility goes into remission and he is no longer an eligible in-
dividual. In 2018, a distribution of $2,400 is made to Adam
from the ABLE account while he is still not an eligible indi-
vidual. The earnings portion, $400, is included in Adam’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 ($14,000 for 2017). 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 more than the annual gift tax exclusion
amount is contributed to your ABLE account? If more
than the annual gift tax exclusion amount is contributed to
your ABLE account, the ABLE program must return to the
contributors the excess contributions (amounts over the
gift-tax exclusion amount) and the earnings on those con-
tributions. The ABLE program should do this on or before
the due date of your income tax return, which is generally
April 15 (including extensions), and must notify you of this
action.
You're subject to a 6% excise tax on the excess contri-
butions and earnings that aren't returned by the ABLE pro-
gram to the contributors by the due date (including exten-
sions) 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 cumula-
tive 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 ac-
tion by the due date of your income tax return, which is
generally April 15 (including extensions).
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, in-
dependence, or quality of life. Qualified disability expen-
ses include those for education, housing, transportation,
employment training and support, assistive technology,
personal support services, health, prevention and well-
ness, financial management, administrative services, le-
gal fees, expenses for oversight and monitoring, and fu-
neral 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 disa-
bility 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, 2018, Dora's ABLE account
has a balance of $2,400; $2,000 is from contributions and
$400 is earnings. During 2018, Dora has qualified disabil-
ity expenses of $1,600, but she receives distributions from
her ABLE account totaling $2,400 on August 2, 2018. She
figures the nontaxable part of her earnings portion as fol-
lows.
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
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Dora will include the difference of $133.33 ($400 –
$266.67) in her gross income for 2018.
The tax on any distribution included in your taxable in-
come 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 benefi-
ciary changes. If you need to move your ABLE account
to another qualified ABLE program because of a change
in residency or 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-pro-
gram 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 estab-
lished 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 pro-
gram to another ABLE program if, for example, you move
from one state to another. 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 trans-
ferred, your first ABLE account is closed after the transfer
is complete. A program-to-program transfer isn’t a distri-
bution so you don’t include any of the transferred amount
in your gross income.
Change of designated beneficiary. Your ABLE pro-
gram 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. After December 22, 2017, roll-
overs may be made without penalty from a section 529
tuition account to a section 529A ABLE account if the ben-
eficiary of the ABLE account is the designated beneficiary
of the tuition account or is an eligible family member. The
annual contributions to an ABLE account, discussed
above in Contribution limitation, applies to these rollovers.
Information returns for ABLE accounts. You may re-
ceive 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 Ac-
counts. An ABLE program issues this form to you to re-
port all distributions made from your ABLE account.
Form 5498-QA, ABLE Account Contribution Infor-
mation. An ABLE program issues this form to you annu-
ally to report contributions (including rollovers), fair market
value of the account, opening of a new account, certifica-
tion 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 administra-
tor.
How To Get Tax Help
If you have questions about a tax issue, need help prepar-
ing your tax return, or want to download free publications,
forms, or instructions, go to IRS.gov and find resources
that can help you right away.
Preparing and filing your tax return. Find free options
to prepare and file your return on IRS.gov or in your local
community if you qualify.
The Volunteer Income Tax Assistance (VITA) program
offers free tax help to people who generally make $54,000
or less, persons with disabilities, and limited-Eng-
lish-speaking taxpayers who need help preparing their
own tax returns. The Tax Counseling for the Elderly (TCE)
program offers free tax help for all taxpayers, particularly
those who are 60 years of age and older. TCE volunteers
specialize in answering questions about pensions and re-
tirement-related issues unique to seniors.
You can go to IRS.gov to see your options for preparing
and filing your return which include the following.
Free File. Go to IRS.gov/FreeFile. See if you qualify
to use brand-name software to prepare and e-file your
federal tax return for free.
VITA. Go to IRS.gov/VITA, download the free IRS2Go
app, or call 1-800-906-9887 to find the nearest VITA
location for free tax preparation.
TCE. Go to IRS.gov/TCE, download the free IRS2Go
app, or call 1-888-227-7669 to find the nearest TCE
location for free tax preparation.
Getting answers to your tax questions. On
IRS.gov get answers to your tax questions any-
time, anywhere.
Go to IRS.gov/Help or IRS.gov/LetUsHelp pages for a
variety of tools that will help you get answers to some
of the most common tax questions.
Go to IRS.gov/ITA for the Interactive Tax Assistant, a
tool that will ask you questions on a number of tax law
topics and provide answers. You can print the entire
interview and the final response for your records.
Go to IRS.gov/Pub17 to get Pub. 17, Your Federal In-
come Tax for Individuals, which features details on
tax-saving opportunities, 2017 tax changes, and thou-
sands of interactive links to help you find answers to
your questions. View it online in HTML, as a PDF, or
download it to your mobile device as an eBook.
You may also be able to access tax law information in
your electronic filing software.
Getting tax forms and publications. Go to IRS.gov/
Forms to view, download, or print all of the forms and pub-
lications you may need. You can also download and view
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popular tax publications and instructions (including the
1040 instructions) on mobile devices as an eBook at no
charge. Or, you can go to IRS.gov/OrderForms to place
an order and have forms mailed to you within 10 business
days.
Access your online account (Individual taxpayers
only). Go to IRS.gov/Account to securely access infor-
mation about your federal tax account.
View the amount you owe, pay online, or set up an on-
line payment agreement.
Access your tax records online.
Review the past 18 months of your payment history.
Go to IRS.gov/SecureAccess to review the required
identity authentication process.
Using direct deposit. The fastest way to receive a tax
refund is to combine direct deposit and IRS e-file. Direct
deposit securely and electronically transfers your refund
directly into your financial account. Eight in 10 taxpayers
use direct deposit to receive their refund. The IRS issues
more than 90% of refunds in less than 21 days.
Delayed refund for returns claiming certain credits.
Due to changes in the law, the IRS can’t issue refunds be-
fore mid-February 2018, for returns that properly claimed
the earned income credit (EIC) or the additional child tax
credit (ACTC). This applies to the entire refund, not just
the portion associated with these credits.
Getting a transcript or copy of a return. The quickest
way to get a copy of your tax transcript is to go to IRS.gov/
Transcripts. Click on either "Get Transcript Online" or "Get
Transcript by Mail" to order a copy of your transcript. If
you prefer, you can:
Order your transcript by calling 1-800-908-9946.
Mail Form 4506-T or Form 4506T-EZ (both available
on IRS.gov).
Using online tools to help prepare your return. Go to
IRS.gov/Tools for the following.
The Earned Income Tax Credit Assistant (IRS.gov/
EIC) determines if you’re eligible for the EIC.
The Online EIN Application (IRS.gov/EIN) helps you
get an employer identification number.
The IRS Withholding Calculator (IRS.gov/W4App) es-
timates the amount you should have withheld from
your paycheck for federal income tax purposes.
The First Time Homebuyer Credit Account Look-up
(IRS.gov/HomeBuyer) tool provides information on
your repayments and account balance.
The Sales Tax Deduction Calculator (IRS.gov/
SalesTax) figures the amount you can claim if you
itemize deductions on Schedule A (Form 1040),
choose not to claim state and local income taxes, and
you didn’t save your receipts showing the sales tax
you paid.
Resolving tax-related identity theft issues.
The IRS doesn’t initiate contact with taxpayers by
email or telephone to request personal or financial in-
formation. This includes any type of electronic com-
munication, such as text messages and social media
channels.
Go to IRS.gov/IDProtection for information and vid-
eos.
If your SSN has been lost or stolen or you suspect
you’re a victim of tax-related identity theft, visit
IRS.gov/ID to learn what steps you should take.
Checking on the status of your refund.
Go to IRS.gov/Refunds.
Due to changes in the law, the IRS can’t issue refunds
before mid-February 2018, for returns that properly
claimed the EIC or the ACTC. This applies to the en-
tire refund, not just the portion associated with these
credits.
Download the official IRS2Go app to your mobile de-
vice to check your refund status.
Call the automated refund hotline at 1-800-829-1954.
Making a tax payment. The IRS uses the latest encryp-
tion technology to ensure your electronic payments are
safe and secure. You can make electronic payments on-
line, by phone, and from a mobile device using the
IRS2Go app. Paying electronically is quick, easy, and
faster than mailing in a check or money order. Go to
IRS.gov/Payments to make a payment using any of the
following options.
IRS Direct Pay: Pay your individual tax bill or estima-
ted tax payment directly from your checking or sav-
ings account at no cost to you.
Debit or credit card: Choose an approved payment
processor to pay online, by phone, and by mobile de-
vice.
Electronic Funds Withdrawal: Offered only when fil-
ing your federal taxes using tax preparation software
or through a tax professional.
Electronic Federal Tax Payment System: Best op-
tion for businesses. Enrollment is required.
Check or money order: Mail your payment to the ad-
dress listed on the notice or instructions.
Cash: You may be able to pay your taxes with cash at
a participating retail store.
What if I can’t pay now? Go to IRS.gov/Payments for
more information about your options.
Apply for an online payment agreement (IRS.gov/
OPA) to meet your tax obligation in monthly install-
ments if you can’t pay your taxes in full today. Once
you complete the online process, you will receive im-
mediate notification of whether your agreement has
been approved.
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Use the Offer in Compromise Pre-Qualifier (IRS.gov/
OIC) to see if you can settle your tax debt for less than
the full amount you owe.
Checking the status of an amended return. Go to
IRS.gov/WMAR to track the status of Form 1040X amen-
ded returns. Please note that it can take up to 3 weeks
from the date you mailed your amended return for it to
show up in our system and processing it can take up to 16
weeks.
Understanding an IRS notice or letter. Go to IRS.gov/
Notices to find additional information about responding to
an IRS notice or letter.
Contacting your local IRS office. Keep in mind, many
questions can be answered on IRS.gov without visiting an
IRS Tax Assistance Center (TAC). Go to IRS.gov/
LetUsHelp for the topics people ask about most. If you still
need help, IRS TACs provide tax help when a tax issue
can’t be handled online or by phone. All TACs now pro-
vide service by appointment so you’ll know in advance
that you can get the service you need without long wait
times. Before you visit, go to IRS.gov/TACLocator to find
the nearest TAC, check hours, available services, and ap-
pointment options. Or, on the IRS2Go app, under the Stay
Connected tab, choose the Contact Us option and click on
“Local Offices.”
Watching IRS videos. The IRS Video portal
(IRSvideos.gov) contains video and audio presentations
for individuals, small businesses, and tax professionals.
Getting tax information in other languages. For tax-
payers whose native language isn’t English, we have the
following resources available. Taxpayers can find informa-
tion on IRS.gov in the following languages.
Spanish (IRS.gov/Spanish).
Chinese (IRS.gov/Chinese).
Vietnamese (IRS.gov/Vietnamese).
Korean (IRS.gov/Korean).
Russian (IRS.gov/Russian).
The IRS TACs provide over-the-phone interpreter serv-
ice in over 170 languages, and the service is available
free to taxpayers.
The Taxpayer Advocate Service Is
Here To Help You
What is the Taxpayer Advocate Service?
The Taxpayer Advocate Service (TAS) is an independ-
ent organization within the IRS that helps taxpayers and
protects taxpayer rights. Our job is to ensure that every
taxpayer is treated fairly and that you know and under-
stand your rights under the Taxpayer Bill of Rights.
What Can the Taxpayer Advocate Service
Do For You?
We can help you resolve problems that you can’t resolve
with the IRS. And our service is free. If you qualify for our
assistance, you will be assigned to one advocate who will
work with you throughout the process and will do every-
thing possible to resolve your issue. TAS can help you if:
Your problem is causing financial difficulty for you,
your family, or your business,
You face (or your business is facing) an immediate
threat of adverse action, or
You’ve tried repeatedly to contact the IRS but no one
has responded, or the IRS hasn’t responded by the
date promised.
How Can You Reach Us?
We have offices in every state, the District of Columbia,
and Puerto Rico. Your local advocate’s number is in your
local directory and at TaxpayerAdvocate.IRS.gov/
Contact-Us. You can also call us at 1-877-777-4778.
How Can You Learn About Your Taxpayer
Rights?
The Taxpayer Bill of Rights describes 10 basic rights that
all taxpayers have when dealing with the IRS. Our Tax
Toolkit at TaxpayerAdvocate.IRS.gov can help you under-
stand what these rights mean to you and how they apply.
These are your rights. Know them. Use them.
How Else Does the Taxpayer Advocate
Service Help Taxpayers?
TAS works to resolve large-scale problems that affect
many taxpayers. If you know of one of these broad issues,
please report it to us at IRS.gov/SAMS.
Low Income Taxpayer Clinics
Low Income Taxpayer Clinics (LITCs) are independent
from the IRS. LITCs represent individuals whose income
is below a certain level and need to resolve tax problems
with the IRS, such as audits, appeals, and tax collection
disputes. In addition, clinics can provide information about
taxpayer rights and responsibilities in different languages
for individuals who speak English as a second language.
Services are offered for free or a small fee. To find a clinic
near you, visit TaxpayerAdvocate.IRS.gov/LITCmap or
see IRS Publication 4134, Low Income Taxpayer Clinic
List.
Accommodations for Persons With
Disabilities
Federally assisted and federally conducted sites are re-
sponsible for ensuring that all requests for reasonable ac-
commodation or modification are granted when the
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request is made by a qualified individual with a disability. If
you have experienced discrimination by an IRS employee
in IRS conducted programs or by a staff member or volun-
teer at one of the assisted program sites, contact:
EDI.Civil.Rights.Division@IRS.gov (email), 202-317-6925
(voice), 855-217-0041 (fax).
Or write to:
Equity, Diversity, and Inclusion
IRS Civil Rights Division
Room 2413
1111 Constitution Ave. NW
Washington, DC 20224
Go to IRS.gov/UAC/Your-Civil-Rights-Are-Protected for
more information.
Publication 907 (2017) Page 11
