By Teresa Ferruzzo, CPA | Partner, abip Advisors

As both a CPA and the parent of an adult daughter with special needs, I’ve learned that some of the most expensive financial mistakes families make aren’t the result of poor decisions—they’re the result of incomplete or inaccurate information.

Special needs planning is one of the few areas where taxes, trusts, government benefits, and financial planning all intersect. Unfortunately, even well-intentioned advice can lead to unnecessary taxes, benefit issues, or planning decisions that have lasting financial consequences.

A Common Example

One of the most common issues I encounter involves Medicaid Waiver payments.

Over the years, I’ve worked with many families whose tax returns reported these payments as taxable income when, based on their specific circumstances and applicable IRS guidance, they may have qualified for exclusion from taxable income. As a result, some families paid taxes they may not have owed—not because they did anything wrong, but because the rules surrounding these payments are often misunderstood.

As both a CPA and a special needs parent, that’s something I take personally.

The Bigger Picture

Medicaid Waiver payments are only one example.

Families caring for a loved one with special needs often find themselves navigating a complicated network of tax rules, Special Needs Trusts, Supplemental Security Income (SSI), Medicaid eligibility requirements, ABLE accounts, and government benefit programs. These areas frequently overlap, and a decision made in one area can unintentionally affect another.

Without specialized guidance, families can unknowingly:

• • Pay taxes they may not owe.
  • Jeopardize eligibility for important government benefits.
  • Structure trusts or financial arrangements in ways that create unintended consequences.
  • Miss planning opportunities that could provide greater financial security for their loved one.

These situations are more common than many people realize—and in many cases, they are preventable.

Why Specialized Guidance Matters

The financial and government benefit systems that special needs families must navigate are incredibly complex. They weren’t designed to be simple, and the rules continue to evolve.

That’s why working with a CPA who focuses on this area can make a meaningful difference.

It’s not simply about preparing a tax return. It’s about understanding how tax law, trust administration, government benefits, and long-term financial planning work together—and helping families make informed decisions with confidence.

Planning for the Future with Confidence

My goal is to help special needs families protect what matters most.

That includes reviewing prior tax returns for potential issues, helping families understand how financial decisions may affect government benefits, coordinating with attorneys and financial advisors, and developing tax strategies that support long-term planning goals.

More importantly, I want families to have someone they can call before making an important financial decision—not after an unintended consequence has already occurred.

Families caring for a loved one with special needs already carry enough responsibility. Navigating complicated tax rules and government benefit programs shouldn’t have to be another burden they face alone.

If your family receives Medicaid Waiver payments, has established—or is considering—a Special Needs Trust, relies on SSI or Medicaid benefits, or simply wants to ensure your planning is on the right track, it’s worthwhile to periodically review your tax filings and planning strategies with a professional who understands how these rules work together.

A proactive conversation today can prevent costly mistakes tomorrow.

About the Author

Teresa Ferruzzo, CPA, is a Partner at abip Advisors, where she focuses her practice on special needs planning, Special Needs Trust taxation, government benefits, and family tax planning. As both a CPA and the parent of an adult daughter with special needs, Teresa brings a unique combination of professional expertise and personal understanding to the families she serves.

To learn more or schedule a consultation, contact Teresa Ferruzzo at 713.350.2423.