Income Tax Credit Points for a Child or Adult with Disabilities (Right)

From All Rights (Kol-Zchut) (www.kolzchut.org.il)

הקדמה:

The Income Tax Authority grants two tax credit points to parents of a child defined as "incapacitated"
If the parents are deceased or not functioning, the benefit may be given to a sibling of the person with disabilities who has been appointed his guardian of "body and property".
Eligibility is also valid for an adult over the age of 18 who meets the conditions of eligibility
A tax refund may be received for up to 6 years retroactively from the date of the request
The value of the benefit is 5,160 NIS per year and 430 NIS per month
For more information, see the Tax Authority website

According to Section 45 of the Income Tax Ordinance, a parent (or the spouse of a parent) whose child is defined as "incapacitated" is eligible to receive two yearly income tax credit points.

Who is eligible?

  • Israeli residents who work and whose child or spouse's child has a disability.
  • The conditions of eligibility vary depending on the child's age (whether the child is under or over the age of 18).

Children under the age of 18

  • The entitlement is given for children under 18 who fulfill one of the following criteria:
  • Paralyzed - Children who have been diagnosed by a neurologist or doctor specializing in child development as paralyzed in one of their limbs, or for whom a doctor has indicated that they were born without a limb or had a limb amputated.
  • Blind - Children who have been diagnosed as being blind by an ophthalmologist.
  • Intellectual developmental disabilities - Children who have been diagnosed as such by a neurologist or doctor specializing in child development.
  • A child with developmental delay due to severe learning disability and referred by a placement committee of special education frameworks. For more information see Income tax credits for a child with a learning disability.
  • A child with a developmental delay, receiving Disabled Child Benefit recipients, or those eligible to receive the benefit who do not for various reasons (such as living in an institution or receiving another benefit, such as a Mobility Benefit).

Adults over the age of 18

  • The entitlement is given for adults over the age of 18 who fulfill one of the following criteria:
  1. They are completely dependent on their parents.
    • Even those living in an institution outside their parents home can be considered "completely dependent".
    • An "incapacitated" adult who has married another "incapacitated" individual and is still dependent on his/her parents may still be considered as "completely dependent" according to the assessment officer's discretion and in accordance with the specific circumstances.
  2. Income test - They and their spouse (if applicable) must meet the income test requirements.
    • Married adults - Their taxable income and their spouse's taxable income may not exceed 267,000 NIS per year as of January 2017 (previously, 268,000 NIS in 2016, 270,000 NIS in 2014 - 2015).
    • Single adults - Their taxable income may not exceed 167,000 NIS per year as of January 2016, (previously 169,00 NIS for 2014-2015).
    • Tax-exempt income is also included for purposes of calculating income test requirements.
  3. Those who are one of the following:

Eligibility of siblings who are legal guardians

  • Siblings who have been appointed to be the legal guardian over that person's body and property for someone with disabilities are entitled to the income tax credit points if their parents are no longer living or not functioning due to age or medical condition.

How to claim it?

  1. If a medical diagnosis is required, Form 127 - "Medical Certificate" filled out by the specialty doctor must be attached. The form must include medical information, a clear diagnosis and a date from which the diagnosis is valid.
  2. For those entitled to receive a Disabled Child Benefit - A copy of the National Insurance Institute notification that was sent to the parents regarding entitlement, as well as Form 127 - "Medical Certificate" filled out by the specialty doctor. The form must include medical information, a clear diagnosis and a date from which the diagnosis is valid.
  3. For children referred to special education - Notification sent to the parents regarding the placement committee decision to refer the child to special education (see sample notification). Documentation that the child actually learns in that special education framework is not necessary.
  4. For adult General Disability Pension recipients - Documentation from the National Insurance Institute indicating the rate of incapacity (74% and higher) and entitlement to the pension (Form 3286 - Section A). This documentation may be requested by calling the call center: *6050, and it will be sent by mail.
  5. For blind adults - Certificate of Blindness/Visual Impairment
  6. For adults with intellectual developmental disabilities - A copy of the intellectual developmental disabilities diagnosis committee decision.
  7. For adults who are paralyzed/blind/have intellectual developmental disabilities (if they are not in the special education system or receive a General Disability Pension) - Declaration from the income tax credit applicant that the individual with a disability is completely dependent, as well as documentation indicating the individual with disabilities' source and amount of income for him/herself and his/her spouse (if applicable).
  • The assessing officer may require additional documentation if they find it necessary in order to examine the entitlement.
  • The assessor's office will give the parents approval for an income tax deduction, which they must give to their employer.

Please note

  • Tax credit points for a disabled child or adult are given in addition to the 2.25 credit points granted to an employee for being an Israeli resident.
  • Parents of two children who meet these conditions are eligible to receive double points (meaning 4 credit points total).
  • The credit is valid for one parent’s salary. If only one parent has custody over the child, that parent may request that the tax credit points only be given to him/her.
  • A new request must be submitted every year. A “multi-year approval,” which indicates a permanent disability (one which is not temporary), may be requested from a doctor or the National Insurance Institute, and may be submitted to the Income Tax Authority, thus making it unnecessary to submit a new request each year. Sometimes the Income Tax Authority issues a multi-year approval without requiring a medical form.
  • Parents are entitled to receive tax refunds for the six years prior to the date such a request was submitted (only if the entitlement existed during those years), with the addition of interest and indexation as is customary for income tax calculations. To receive the refund, submit a tex return request to the tax authority. For more information, see Income Tax Return.
  • If the employee meets criteria entitling additional income tax credit points, he may receive the aggregate of all the credits, in accordance with each criterion (unless otherwise stated). For details on these entitlements, see the portal page Income Tax Credit Points.

Aid organizations

Click here for a comprehensive categorized listing of healthcare organizations offering assistance and support to people with various disabilities.

Government agencies

Laws & Regulations

Additional publications

Sources

endarticle