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Independent Living News & Policy from the National Council on Independent Living

Deductibility of Work-Related Expenses for Persons with Disabilities

Approved by the NCIL Membership June, 2004

WHEREAS, the majority of unemployed persons with disabilities want to work.

  • Explanation: Twenty percent of the U.S. population – approximately 54 million Americans – has disabilities. The unemployment rate amongst the disabled population is 70%, compared with 5% in the total general population. Two-thirds of those unemployed persons with disabilities and of working age express an interest in working; and 

WHEREAS, significant barriers to employment exist, one of which is financial.

  • Explanation: Persons with significant disabilities often incur significant costs preparing for and getting to the workplace. These expenses are not covered by “private” medical insurance. Medicaid specifically excludes expenses related to work; and

WHEREAS, current tax law allows personal care expenses related to certain activities, but not related to working, to qualify as medical expenses; and

  • Explanation: Medical expenses are only a benefit for tax purposes if the taxpayer itemizes deductions using Schedule A and if those medical expenses exceed 7.5% of the taxpayer’s adjusted gross income (AGI). One-third of American taxpayers itemize deductions. Eighty-five percent of those who itemize qualify to do so because they are homeowners. This is demonstrated by the presence of interest on a home mortgage and/or property tax being included on Schedule A. This tax benefit would not be as available to persons with disabilities because they are less likely to be homeowners. Less than 10% of persons with disabilities own homes in the United States; and

WHEREAS, the previously described set of circumstances reduces the probability that a person with a significant disability will be able to afford to spend the money required to find, acquire and retain his/her employment; and

WHEREAS, legislation has been written which would allow such work-related expenses to be deductible for federal income tax purposes, regardless of whether the filer itemizes deductions or not; and

WHEREAS, this legislation was introduced in both the Houses of the legislature during 2003; and

  • HR1693: sponsored by Representative Gerald D. Kleczka [WI-4]; (introduced 04/09/2003); Committees: House Ways and Means; Latest Major Action: 04/09/2003 Referred to House committee; Status: Referred to the House Committee on Ways and Means
  • SB 1560: sponsored by Senator Herb Kohl [WI] (introduced 08/01/2003); Latest Major Action: 08/01/2003 Referred to Senate Committee; Status: Read twice and referred to the Committee on Finance

WHEREAS, the co-sponsors of HR 1693 are as follows:

  • Rep Emanuel, Rahm – 5/13/2003 [IL-5]
  • Rep Foley, Mark – 4/29/2003 [FL-16]
  • Rep Lipinski, William O. – 6/25/2003 [IL-3]
  • Rep Paul, Ron – 4/11/2003 [TX-14]
  • Rep Sensenbrenner, F. James, Jr. – 6/16/2003 [WI-5]
  • Rep Slaughter, Louise McIntosh – 4/29/2003 [NY-28]
  • Rep Wynn, Albert Russell – 4/10/2003 [MD-4]

BE IT THEREFORE RESOLVED: NCIL, its member organizations across the United States and their constituents, support the passage into law of HR 1693 and SB 1560, jointly known as The Disabled Workers Empowerment Act.

Respectfully Submitted by: Martha M. Valerio