Internal Revenue Service United States Department of the Treasury
Level Basic Intermediate Advanced Military International

Miscellaneous Credits

Credit for the Elderly or the Disabled

Eligibility Requirements

The next credit that will be covered is the credit for the elderly or the disabled. The credit for the elderly or the disabled is calculated on Schedule R and reported in Form 1040, Tax and Credits section.

Tax software hint.

The credit is carried from Schedule R to Form 1040, line 53, and box c is checked. The software will display Schedule R in the space to the right of box c.

Qualifying Individuals

To qualify for the credit for the elderly or the disabled, individuals must be:

  • Age 65 or older at the end of 2011 or
  • Under age 65, retired on permanent and total disability, receiving taxable disability income, and have not reached the mandatory retirement age their company has set
Tip

A taxpayer with a permanent and total disability is unable to engage in "substantial, gainful activity," in other words, paid employment. Taxpayers who can do such work are not considered disabled. Working in a sheltered workshop setting, however, is not considered substantial, gainful activity.

Mandatory retirement age is the age set by a taxpayer's employer at which the taxpayer would have been required to retire, had the taxpayer not become disabled.

Generally, disability income comes from an employer's disability insurance, health plan, or pension plan. The payments replace wages for the time the taxpayer missed work because of the disability. The plan must provide for disability retirement for the payments to be considered disability income.

To guide your interview and determine if the taxpayer is a qualifying individual, refer to the Credit for Elderly or Disabled — Decision Tree, Figure A. Are You a Qualified Individual?, in the Volunteer Resource Guide (Tab G).