PERIODICALLY we hear the question whether or not persons with disabilities pay tax.

Generally speaking, persons with disabilities are liable to pay tax on their income in the same way as everyone else.

However, the tax system does exempt certain income from tax for persons with disabilities of a permanent nature. It is, therefore, very important that persons with disabilities understand whether or not they qualify for this tax exemption and the circumstances under which they would. The following outlines information for persons with disabilities to assist them to understand how taxes may affect them.

Who can qualify for exemption?

Anyone who is permanently incapacitated, either physically or mentally, and is certified as such by the Jamaica Council for Persons with Disabilities and the chief medical officer in the Ministry of Health is exempt from income tax on their emoluments, whether its employment or pension income. This would occur in the circumstances that such a person is:

* Suffering from a disabling permanent physical disability, infirmity, malformation or disfigurement of indefinite duration, resulting from illness, injury or congenital defect; and or

* Suffering from a disabling permanent mental handicap, but capable of being gainfully employed.

How to apply for the disability exemption

Under Section 12(Y) of the Income Tax Act, the law provides for any person suffering from a permanent physical or mental disability, but who is capable of being gainfully employed to be exempt from Income Tax on their emoluments.

* Employees who are certified to be permanently disabled through the Jamaica Council for Persons with Disabilities (age 18 – 65), which is located at 18 Ripon Road, Kingston 5, may be entitled to a tax refund as they are exempt from Income Tax, as certified by the Council.

* The individual must also be certified as being disabled by the minister responsible for social security, on the advice of the chief medical officer (CMO), Ministry of Health.

* The certification from the CMO must be signed by the minister of labour & social security.

* Letters of certification are then dispatched to Tax Administration Jamaica, the employer and the individual.

* The person with disability then needs to submit a letter or application Form P01, applying for the exemption, along with a copy of the letter of certification from the Jamaica Council for Persons with Disabilities and supporting documents to the Refunds Unit, Tax Administration Jamaica, 116 East Street, Kingston to have the exemption processed. Where a refund is also being claimed, a Form IT05 will have to be completed and submitted, attaching any relevant documents. Please note that a refund claim is restricted to six years.

The exemption shall cease if that individual either, on such medical examination as the Minister responsible for Social Security may at any time require, is certified by the chief medical officer to be no longer suffering from the physical handicap or mental handicap aforesaid or fails to submit for such medical examination.

General Information

It should be carefully noted that the disability exemption only applies to income from emolument. Therefore, even if a person is certified as disabled but owns and operates their own business as a self-employed person or a company, the income earned from that source would not be exempt. The same goes for income from other sources such as rent, farming, investments, in that such income is also subject to tax.

However as an individual, resident in Jamaica, they would be entitled to the income tax threshold, which is currently $507,312. Additionally if the individual is in receipt of a pension, such as NIS, they would be entitled to a pension exemption of $80,000. Also if the person is age 65 or over, they would be entitled to an age exemption of $80,000.

The Talking Tax series is prepared by the Communications Unit of Tax Administration Jamaica to guide the public on their rights and obligations. To get additional information on this or any other tax matter, persons may contact 1-888-TAX-HELP (829-4357) or visit www.jamaicatax.gov.jm.