Table of Contents
You can take the credit for the elderly or the disabled if you meet both of the following requirements.
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You are a qualified individual.
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Your income is not more than certain limits.
You can use Figure A and Table 1 as guides to see if you are eligible for the credit. Use Figure A first to see if you are a qualified individual. If you are, go to Table 1 to make sure your income is not too high to take the credit.
You are a qualified individual for this credit if you are a U.S. citizen or resident alien, and either of the following applies.
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You were age 65 or older at the end of 2012.
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You were under age 65 at the end of 2012 and all three of the following statements are true.
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You retired on permanent and total disability (explained later).
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You received taxable disability income for 2012.
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On January 1, 2012, you had not reached mandatory retirement age (defined later under Disability income ).
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You must be a U.S. citizen or resident alien (or be treated as a resident alien) to take the credit. Generally, you cannot take the credit if you were a nonresident alien at any time during the tax year.
Generally, if you are married at the end of the tax year, you and your spouse must file a joint return to take the credit. However, if you and your spouse did not live in the same household at any time during the tax year, you can file either joint or separate returns and still take the credit.
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You file a separate return.
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You paid more than half the cost of keeping up your home during the tax year.
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Your spouse did not live in your home at any time during the last 6 months of the tax year and the absence was not temporary. (See Temporary absences in Publication 501.)
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Your home was the main home of your child, stepchild, or an eligible foster child for more than half the year. An eligible foster child is a child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.
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You can claim an exemption for that child, or you cannot claim the exemption only because the noncustodial parent can claim the child using the rules for children of divorced or separated parents.
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If you are under age 65 at the end of 2012, you can qualify for the credit only if you are retired on permanent and total disability (discussed next) and have taxable disability income (discussed later under Disability income ). You are retired on permanent and total disability if:
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You were permanently and totally disabled when you retired, and
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You retired on disability before the close of the tax year.
Even if you do not retire formally, you may be considered retired on disability when you have stopped working because of your disability.
If you retired on disability before 1977, and were not permanently and totally disabled at the time, you can qualify for the credit if you were permanently and totally disabled on January 1, 1976, or January 1, 1977.
Example 1.
Trisha, a sales clerk, retired on disability. She is 53 years old and now works as a full-time babysitter for the minimum wage. Even though Trisha is doing different work, she is able to do the duties of her new job in a full-time competitive work situation for the minimum wage. She cannot take the credit because she is able to engage in substantial gainful activity.
Example 2.
Tom, a bookkeeper, retired on disability. He is 59 years old and now drives a truck for a charitable organization. He sets his own hours and is not paid. Duties of this nature generally are performed for pay or profit. Some weeks he works 10 hours, and some weeks he works 40 hours. Over the year he averages 20 hours a week. The kind of work and his average hours a week conclusively show that Tom is able to engage in substantial gainful activity. This is true even though Tom is not paid and he sets his own hours. He cannot take the credit.
Example 3.
John, who retired on disability, took a job with a former employer on a trial basis. The purpose of the job was to see if John could do the work. The trial period lasted for 6 months during which John was paid the minimum wage. Because of John's disability, he was assigned only light duties of a nonproductive “make-work” nature. The activity was gainful because John was paid at least the minimum wage. But the activity was not substantial because his duties were nonproductive. These facts do not, by themselves, show that John is able to engage in substantial gainful activity.
Example 4.
Joan, who retired on disability from a job as a bookkeeper, lives with her sister who manages several motel units. Joan helps her sister for 1 or 2 hours a day by performing duties such as washing dishes, answering phones, registering guests, and bookkeeping. Joan can select the time of day when she feels most fit to work. Work of this nature, performed off and on during the day at Joan's convenience, is not activity of a “substantial and gainful” nature even if she is paid for the work. The performance of these duties does not, of itself, show that Joan is able to engage in substantial gainful activity.
To determine if you can claim the credit, you must consider two income limits. The first limit is the amount of your adjusted gross income (AGI). The second limit is the amount of nontaxable social security and other nontaxable pensions, annuities, or disability income you received. The limits are shown in Table 1.
If your AGI and your nontaxable pensions, annuities, or disability income are less than the income limits, you may be able to claim the credit. See Figuring the Credit Yourself , later.
| IF your filing status is | THEN, even if you qualify (see Figure A), you CANNOT take the credit if | |||||
| Your adjusted gross income (AGI)* is equal to or more than... | OR the total of your nontaxable social security and other nontaxable pension(s), annuities, or disability income is equal to or more than... | |||||
| single, head of household, or qualifying widow(er) with dependent child | $17,500 | $5,000 | ||||
| married filing jointly and only one spouse qualifies in Figure A | $20,000 | $5,000 | ||||
| married filing jointly and both spouses qualify in Figure A | $25,000 | $7,500 | ||||
| married filing separately and you lived apart from your spouse for all of 2012 | $12,500 | $3,750 | ||||
You can figure the credit yourself, or the Internal Revenue Service (IRS) will figure it for you. See Figuring the Credit Yourself , next.
If you can take the credit and you want the IRS to figure the credit for you, attach Schedule R to your return. Check the appropriate box in Part I of Schedule R and fill in Part II and lines 11, 13a, and 13b of Part III, if they apply to you.
If you file Form 1040A, enter “CFE” in the space to the left of Form 1040A, line 30. If you file Form 1040, check box c on Form 1040, line 53, and enter “CFE” on the line next to that box. Attach Schedule R to your return.
| IF your filing status is... | THEN enter on line 10 of Schedule R... | |||
| single,head of household, or qualifying widow(er) with dependent child and, by the end of 2012, you were | ||||
| • | 65 or older | $5,000 | ||
| • | under 65 and retired on permanent and total disability1 | $5,000 | ||
| married filing a joint return and by the end of 2012 | ||||
| • | both of you were 65 or older | $7,500 | ||
| • | both of you were under 65 and one of you retired on permanent and total disability1 | $5,000 | ||
| • | both of you were under 65 and both of you retired on permanent and total disability2 | $7,500 | ||
| • | one of you was 65 or older, and the other was under 65 and retired on permanent and total disability3 |
$7,500 | ||
| • | one of you was 65 or older, and the other was under 65 and not retired on permanent and total disability |
$5,000 | ||
| married filing a separate return and you did not live with your spouse at any time during the year and, by the end of 2012, you were | ||||
| • | 65 or older | $3,750 | ||
| • | under 65 and retired on permanent and total disability1 | $3,750 | ||
If you figure the credit yourself, fill out the front of Schedule R. Next, fill out Schedule R, Part III. If you file Form 1040A, enter the amount from Schedule R, line 22 on line 30. If you file Form 1040, include the amount from Schedule R, line 22 on line 53, check box c, and enter “Sch R” on the line next to that box.
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Determine your initial amount (lines 10–12).
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Determine the total of any nontaxable social security and certain other nontaxable pensions, annuities, and disability benefits you received (lines 13a, 13b, and 13c).
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Determine your excess adjusted gross income (lines 14–17).
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Determine the total of steps 2 and 3 (line 18).
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Determine your credit (lines 19–22).
These steps are discussed in more detail next.
To figure the credit, you must first determine your initial amount using lines 10 through 12. See Table 2. Your initial amount is on line 12.
Step 2 is to figure the total amount of nontaxable social security and certain other nontaxable payments you received during the year. You must reduce your initial amount by these payments.
Enter these nontaxable payments on lines 13a or 13b and total them on line 13c. If you are married filing jointly, you must enter the combined amount of nontaxable payments both you and your spouse received.
Include the following nontaxable payments in the amounts you enter on lines 13a and 13b.
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Nontaxable social security payments. This is the nontaxable part of the benefits shown in box 5 of Form SSA-1099, Social Security Benefit Statement, before deducting any amounts withheld to pay premiums on supplementary Medicare insurance, and before any reduction because of benefits received under workers' compensation. (Do not include a lump-sum death benefit payment you may receive as a surviving spouse, or a surviving child's insurance benefit payments you may receive as a guardian.)
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Nontaxable railroad retirement pension payments treated as social security. This is the nontaxable part of the benefits shown in box 5 of Form RRB-1099, Payments by the Railroad Retirement Board.
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Nontaxable pension or annuity payments or disability benefits that are paid under a law administered by the Department of Veterans Affairs (VA). (Do not include amounts received as a pension, annuity, or similar allowance for personal injuries or sickness resulting from active service in the armed forces of any country or in the National Oceanic and Atmospheric Administration or the Public Health Service, or as a disability annuity under section 808 of the Foreign Service Act of 1980.)
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Pension or annuity payments or disability benefits that are excluded from income under any provision of federal law other than the Internal Revenue Code. (Do not include amounts that are a return of your cost of a pension or annuity. These amounts do not reduce your initial amount.)
You also must reduce your initial amount by your excess adjusted gross income. Figure your excess adjusted gross income on lines 14–17.
You figure your excess adjusted gross income as follows:
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Subtract from your adjusted gross income (Form 1040A, line 22 or Form 1040, line 38) the amount shown for your filing status.
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$7,500 if you are single, a head of household, or a qualifying widow(er) with dependent child,
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$10,000 if you are married filing jointly, or
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$5,000 if you are married filing separately and you and your spouse did not live in the same household at any time during the tax year.
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Divide the result of (1) by 2.
To determine if you can take the credit, you must add (on line 18) the amounts you figured in Step 2 (line 13c) and Step 3 (line 17).
Subtract the amount determined in Step 4 (line 18) from the amount determined in Step 1 (line 12), and multiply the result by 15% (.15).
In certain cases, the amount of your credit may be limited. See Limit on credit , later.
Example.
You are 66 years old and your spouse is 64. Your spouse is not disabled. You file a joint return on Form 1040. Your adjusted gross income is $14,630. Together you received $3,200 from social security, which was nontaxable. You figure the credit as follows:
| Example applying the 5 step process | Amount | ||
|---|---|---|---|
| (Line references (shown in parentheses) are to the Schedule R) |
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| 1. | Initial amount (line 12) | $5,000 | |
| 2. | Total nontaxable social security and other nontaxable pensions (line 13c) |
$3,200 | |
| 3. | Excess adjusted gross income ($14,630–$10,000) ÷ 2 (line 17) |
2,315 | |
| 4. | Add (2) and (3) (line 18) | 5,515 | |
| 5. | Subtract (4) from (1) (line 12 – line 18 = line 19) (Do not enter less than -0-) |
$ -0- | |
You cannot take the credit because your nontaxable social security plus your excess adjusted gross income is more than your initial amount.
The following examples illustrate the credit for the elderly or the disabled. The initial amounts are taken from Table 2, earlier.
Example 1.
James Davis is 58 years old, single, and files Form 1040A. In 2010 he retired on permanent and total disability, and he is still permanently and totally disabled. He got the required physician's statement in 2010 and kept it with his tax records. His physician signed on line B of the statement. This year James checks the box in Schedule R, Part II. He does not need to get another statement for 2012.
He received the following income for the year:
James' adjusted gross income is $11,500 ($11,400 + $100). He figures the credit on Schedule R as follows:
| 1. | Initial amount | $5,000 | |||
| 2. | Taxable disability pension | 11,400 | |||
| 3. | Smaller of line 1 or line 2 | 5,000 | |||
| 4. | Nontaxable social security benefits |
$1,500 | |||
| 5. | Excess adjusted gross income ($11,500 − $7,500) ÷ 2 |
2,000 | |||
| 6. | Add lines 4 and 5 | 3,500 | |||
| 7. | Subtract line 6 from line 3 (Do not enter less than (-0-)) |
1,500 | |||
| 8. | Multiply line 7 by 15% (.15) | 225 | |||
| 9. | Enter the amount from the Credit Limit Worksheet in the Instructions for Schedule R, line 21 |
201 | |||
| 10. | Credit (Enter the smaller of line 8 or line 9) |
$ 201 | |||
He enters $201 on line 30 of Form 1040A. The Schedule R for James Davis is not shown.
Example 2.
William White is 53. His wife Helen is 49. William had a stroke 3 years ago and retired on permanent and total disability. He is still permanently and totally disabled because of the stroke. In November, Helen was injured in an accident at work and retired on permanent and total disability.
William received nontaxable social security disability benefits of $2,800 during the year and a taxable disability pension of $6,200. Helen earned $11,250 from her job and received a taxable disability pension of $1,700. Their joint return on Form 1040 shows adjusted gross income of $19,150 ($6,200 + $11,250 + $1,700). They do not itemize deductions. They do not have any amounts that would increase their standard deduction.
Helen's doctor completed the physician's statement in the Instructions for Schedule R. Helen is not required to include the statement with their return, but she must keep it for her records.
William got a physician's statement for the year he had the stroke. His doctor had signed on line B of that physician's statement to certify that William was permanently and totally disabled. William has kept the physician's statement with his records. He checks the box on Schedule R, Part II and writes his first name in the space above the box on line 2.
William and Helen use Schedule R to figure their $16 credit for the elderly or the disabled. They attach Schedule R to their Form 1040 and enter $16 on line 53. They check box c on line 53 and enter “Sch R” on the line next to that box. See their filled-in Schedule R and Helen's filled-in physician's statement, later.
| Taxpayer | Physician |
| If you retired after 1976, enter the date you retired in the space provided on the statement below. | A person is permanently and totally disabled if both of the following apply: |
| 1. He or she cannot engage in any substantial gainful activity because of a physical or mental condition. | |
| 2. A physician determines that the disability has lasted or can be expected to last continuously for at least a year or can lead to death. | |
| Physician's Statement | |
| I certify that Helen A. White | |
| Name of disabled person | |
| was permanently and totally disabled on January 1, 1976, or January 1, 1977, or was permanently and totally disabled on the date he or she retired. If retired after 1976, enter the date retired ▶ November 1, 2012 | |
| Physician: Sign your name on either A or B below. | |
| AThe disability has lasted or can be expected to last continuously for at least a year | |
| Physician's signatureDate | |
| BThere is no reasonable probability that the disabled condition will ever improve | Ayden D. Doctor 2/8/13 |
| Physician's signatureDate | |
| Physician's name | Physician's address |
| Ayden D. Doctor | 1900 Green St., Hometown, MD 20000 |
Page 1 of Schedule R for the Whites
Page 2 of Schedule R for the Whites
You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.
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E-file your return. Find out about commercial tax preparation and e-file services available free to eligible taxpayers.
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Check the status of your 2012 refund. Go to IRS.gov and click on Where’s My Refund? Refund information will generally be available within 24 hours after the IRS receives your e-filed return, or 4 weeks after you mail your paper return. If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Have your 2012 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Where’s My Refund does not include information about refunds for a prior-year or an amended return.
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You can obtain a free transcript online at IRS.gov by clicking on Order a Return or Account Transcript under “Tools.”For a transcript by phone, call 1-800-908-9946 and follow the prompts in the recorded message. You will be prompted to provide your SSN or Individual Taxpayer Identification Number (ITIN), date of birth, street address and Zip Code.
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