Below is an extensive discussion of the legal framework, historical context, and current status of tax exemptions (and related benefits) available to parents or legal guardians of Persons with Disabilities (PWD) in the Philippines. This article focuses on income tax exemptions and relevant privileges under Philippine law, highlighting the changes brought about by recent tax reforms.

1. Introduction

The Philippines has enacted several laws to protect and promote the rights of Persons with Disabilities (PWDs). These laws provide different kinds of support—ranging from healthcare benefits to tax incentives and discounts on basic goods and services. Of particular interest to many Filipino families is whether parents or guardians of PWD children can claim any form of tax exemption or benefit when computing their personal income tax.

2. Key Legislation Affecting Tax Benefits for PWDs and Their Parents

Republic Act (R.A.) No. 7277 (Magna Carta for Persons with Disability), as amended by subsequent laws, first laid out the fundamental rights and privileges of PWDs in the Philippines.
Republic Act (R.A.) No. 10754 (An Act Expanding the Benefits and Privileges of Persons with Disability) took effect in 2016. It introduced and clarified certain benefits for PWDs, including:
- Value-Added Tax (VAT) exemption on specific goods and services.
- A 20% discount on the purchase of goods and services enumerated in the law.
- A provision granting an additional income tax exemption to parents or legal guardians of PWD dependents.
Republic Act (R.A.) No. 10963 (Tax Reform for Acceleration and Inclusion or the “TRAIN Law”), effective January 1, 2018, overhauled the Philippine tax system. One of its key changes was the removal of personal and additional exemptions (including exemptions for dependents) under the National Internal Revenue Code (NIRC), as amended. This has a direct bearing on whether parents of PWD children can still avail of extra tax exemptions.

3. Historical Context of Additional Tax Exemptions for Dependent PWDs

3.1. Pre-TRAIN Law (Before January 1, 2018)

Personal and Additional Exemptions
Under the old tax system (pre-2018), individual taxpayers were allowed:
- A personal exemption amount (e.g., Php 50,000 for single or married individuals).
- Additional exemptions of Php 25,000 per qualified dependent child (up to a maximum of four dependents).
Additional Exemption for PWD Dependents under R.A. No. 10754
When R.A. No. 10754 took effect in 2016, it specifically provided that the father or mother of any PWD would be entitled to an additional tax exemption of Php 25,000 for each dependent PWD. This was intended to support parents bearing the often higher cost of care and special services needed by a child with a disability.

3.2. Post-TRAIN Law (Starting January 1, 2018)

Repeal of Personal and Additional Exemptions
Under the TRAIN Law (R.A. No. 10963), the entire system of personal and additional exemptions was removed. Individual taxpayers are now taxed under new brackets and rates. Instead of claiming personal and additional exemptions, taxpayers benefit from:
1. Higher tax-exempt thresholds for annual income (first Php 250,000 of income is taxed at 0%).
2. Simplified tax rates and structures.
Effect on R.A. No. 10754’s Additional Exemption
Because the TRAIN Law effectively abolished the mechanism of personal and additional exemptions, the specific provision in R.A. No. 10754 granting Php 25,000 as an “additional exemption” for a PWD dependent can no longer be used in the same way. Legislative intent and official Bureau of Internal Revenue (BIR) issuances have clarified that:
- The provision on additional exemption under R.A. 10754 is rendered inoperative after 2018 because it relied on the old personal and additional exemption regime of the Tax Code.
- Consequently, parents or guardians can no longer claim the Php 25,000 additional tax exemption for each PWD dependent when they file their income tax returns starting 2018 onwards.

4. Other Tax-Related Benefits and Privileges for PWDs (Indirect Benefits to Parents)

Although the TRAIN Law removed the direct additional tax exemption for parents of PWD children, other benefits remain in place that indirectly ease the financial burden of parents or guardians. These are tied to the PWD child rather than the parent’s income-tax computation:

20% Discount and VAT Exemption
- Under R.A. No. 10754 and its Implementing Rules and Regulations (IRR), PWDs (or authorized representatives/parents purchasing on their behalf) receive a 20% discount plus VAT exemption on select goods and services.
- These goods and services typically include:
  - Medicines and medical supplies (used by the PWD).
  - Professional fees of attending doctors (if the services are for the PWD).
  - Fares on public transportation (domestic air, sea, land).
  - Admission fees to theaters, leisure, amusement, and other places of culture, recreation, and sports where entrance fees are charged.
- Purchases must be for the exclusive use and enjoyment of the PWD to be eligible for the discount and VAT exemption. Proof such as a PWD ID (issued by local government units) must be presented.
PhilHealth and Other Healthcare-Related Subsidies
- Depending on the PWD’s condition, parents may also benefit from additional healthcare coverage or subsidies. While these are not “tax exemptions” in the strict sense, they reduce overall healthcare costs, indirectly easing financial burdens.
Discounts on Basic Necessities and Prime Commodities (During Special Circumstances)
- In certain cases (e.g., local government ordinances, special national issuances), PWDs may also enjoy discounts on basic necessities (rice, canned goods, etc.) and prime commodities, akin to discounts given to senior citizens.

5. Employment Incentives for Companies Hiring PWDs

While not a direct personal income tax benefit for parents, it is worth noting that:

Employers who hire PWDs may claim additional deductions from their gross income for the salaries and wages of PWD employees, subject to specific conditions and documentation requirements under the Tax Code (as amended) and R.A. No. 7277 (Magna Carta for PWDs).
This can create more employment opportunities for PWDs, possibly benefiting adult PWD dependents in some families who can work.

6. Potential Local (LGU) Incentives

Certain local government units (LGUs) may provide additional incentives or local tax relief measures to families of PWDs. These could be in the form of:

Real property tax discounts or fee waivers.
Reduced fees for licenses and local government services.

Because these vary by municipality or city, parents and guardians should check with their respective LGUs to see if local ordinances offer added relief.

7. Practical Tips for Parents with PWD Children

Obtain a Valid PWD ID
- Ensure that the child’s PWD ID is updated and valid, as it is crucial for availing of the 20% discount and VAT exemption.
Keep Records of Purchases and Medical Expenses
- Even though additional personal exemptions no longer apply, keeping detailed records helps when claiming any medical expense deductions (if allowable for self-employed or professionals under the optional standard deduction rules, or itemized deductions).
Verify with Employers and the BIR
- If you are employed, regularly check with your company’s HR or payroll department regarding any updated BIR regulations or clarifications that could impact your take-home pay or allowable deductions.
Stay Updated on Legislative Changes
- Proposed laws or amendments could alter the tax treatment of PWD-related expenses. Monitor any new bills filed in Congress that might restore or restructure additional exemptions for PWD dependents.

8. Conclusion

Before 2018: Parents of PWD children were entitled to an additional Php 25,000 tax exemption under R.A. No. 10754, on top of standard personal and dependent exemptions under the old tax regime.
After the TRAIN Law took effect in 2018: The entire system of personal and additional exemptions was repealed, effectively eliminating the additional Php 25,000 tax exemption for parents of PWD children.
Nonetheless, R.A. No. 10754’s other benefits (such as the 20% discount and VAT exemption for the PWD’s exclusive purchases) continue to apply. These non-income-tax perks substantially reduce the cost of healthcare, transportation, and other necessary services for PWDs.

Families with PWD dependents should therefore focus on maximizing these remaining discounts and exemptions and keep abreast of any further legislative changes that might restore direct income-tax benefits or introduce new forms of tax relief for parents caring for children with disabilities.

Disclaimer

This article provides general information only and does not constitute legal advice. For specific tax concerns or questions regarding the applicability of the laws mentioned, it is best to consult directly with the Bureau of Internal Revenue (BIR) or a qualified tax/legal professional.