Non-Profit Leads Push for Tax Credit for Special Needs Families

A Florida non-profit organization has begun a petition drive urging Congress to offer a tax credit to families of children with special needs to assist with the costs of obtaining guardianship.

Prosperity Life Planning, the organization behind the petition, teaches families of children with special needs how to locate resources for their children while preserving access to government benefits. According to a recent article in US News and World Report, the organization decided to pursue the petition because "families often can't afford to set up a guardianship, which involves court expenses and doctors' fees, so they don't do it."

Once a child turns 18, parents’ legal relationship with the child changes because suddenly it is presumed that the child has the ability to make decisions on her own, regardless of her abilities. At this point, one option is to become the child's legal guardian so that the parents can continue to make the important medical and financial decisions on child’s behalf. The proposed tax credit would give families an incentive to pursue guardianship, which many avoid because of the costs.
Prosperity Life Planning is proposing that a tax credit of up to $5,000 would be available to reimburse families for the legal fees they incur in order to obtain guardianship of their child.

The same tax credit could also be used to help families establish a supplemental needs trust for their child with special needs. These trusts are used to preserve assets for a person with special needs in order to supplement any benefits he receives from the government. According to the proposal, the tax credit should be made available to any family member of a child with special needs who pursues guardianship or intends to draft a supplemental needs trust (especially in situations where a child is being raised by family members other than her parents) and would be tracked using the child's Social Security number, so only one tax credit per child could be used.

Prosperity Life Planning points out that the government already provides numerous tax incentives for programs that benefit the public, including tax-deductible retirement accounts and education tax credits. Prosperity Life Planning argues that families of children with special needs face greater challenges than most with minimal government resources to assist them.

To read more about the tax credit proposal, and to download a statement that you can mail to Prosperity Life Planning to show your support for their initiative, go to www.prosperitylifeplanning.org.