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previous page Previous Page: Publication 524 - Credit for the Elderly or the Disabled - Credit Figured for You
next page Next Page: Publication 524 - Credit for the Elderly or the Disabled - How To Get Tax Help
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pubs/p524-002.htm#en_us_publink100038698

Figuring the Credit Yourself(p6)


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previous topic occurrence the Credit Yourself next topic occurrence

If you figure the credit yourself, fill out the front of either Schedule R (if you are filing Form 1040) or Schedule 3 (if you are filing Form 1040A). Next, fill out Part III of either Schedule R or Schedule 3.
Pencil
There are five steps in Part III to determine the amount of your credit:
  1. Determine your initial amount (lines 10–12).
  2. Determine the total of any nontaxable social security and certain other nontaxable pensions and benefits you received (lines 13a, 13b, and 13c).
  3. Determine your excess adjusted gross income (lines 14–17).
  4. Determine the total of steps 2 and 3 (line 18).
  5. Determine your credit (lines 19–24 of Schedule R or lines 19–22 of Schedule 3).
These steps are discussed in more detail next.
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Step 1. Determine Initial Amount(p6)


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To figure the credit, you must first determine your initial amount using lines 10 through 12. See Table 1. Your initial amount is on line 12.
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Initial amounts for persons under age 65.(p6)


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If you are a qualified individual under age 65, your initial amount cannot be more than your taxable disability income.
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Step 2. Total Certain Nontaxable Pensions and Benefits(p6)


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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 a joint return, you must enter the combined amount of nontaxable payments both you and your spouse receive.
Deposit
Worksheets are provided in the instructions for Forms 1040 and 1040A to help you determine if any of your social security benefits (or equivalent railroad retirement benefits) are taxable.
Include the following nontaxable payments in the amounts you enter on lines 13a and 13b.
EIC
You should be sure to take into account all of the nontaxable amounts you receive. These amounts are verified by the IRS through information supplied by other government agencies.
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Step 3. Determine Excess Adjusted Gross Income(p7)


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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:
  1. Subtract from your adjusted gross income (line 38 of Form 1040 or line 22 of Form 1040A) the amount shown for your filing status in the following list.
    1. $7,500 if you are single, a head of household, or a qualifying widow(er) with a dependent child,
    2. $10,000 if you are married filing a joint return, or
    3. $5,000 if you are married filing a separate return and you and your spouse did not live in the same household at any time during the tax year.
  2. Divide the result of (1) by 2.
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Step 4. Determine the Total of Steps 2 and 3(p7)


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To determine if you can take the credit, you must add (on line 18) the amounts you figured in Step 2 and Step 3.
IF the total of
Steps 2 and 3 is...
THEN...
equal to or more than the amount in Step 1 you cannot take the credit.
less than the amount in Step 1 you can take the credit.
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Step 5. Determine Your Credit(p7)


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If you can take the credit, subtract the amount determined in Step 4 (line 18) from the amount determined in Step 1 (line 12), and multiply the result by 15%.
In certain cases, the amount of your credit may be limited. See Limit on credit, later.
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Example.(p7)

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 processAmount
1.Initial amount $5,000
2.Total nontaxable social security and
other nontaxable pensions
$3,200 
3.Excess adjusted gross income
($14,630–$10,000) ÷ 2
2,315 
4.Add line 2 and line 3 5,515
5.Subtract line 4 from line 1
(Do not enter less than (-0-))
 $ -0-
You cannot take the credit because your nontaxable social security (line 2a) plus your excess adjusted gross income (line 2b) is more than your initial amount (line 1).
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Limit on credit.(p7)


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The amount of credit you can claim is generally limited to the amount of your tax. For more information, see the instructions for Part III, Schedule R (Form 1040) or Schedule 3 (Form 1040A).
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Examples(p7)


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previous topic occurrence Examples next topic occurrence

The following examples illustrate the credit for the elderly or the disabled. The initial amounts are taken from Table 1. Initial Amounts.
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Example 1.(p7)

James Davis is 58 years old, single, and files Form 1040A. In 1998 he retired on permanent and total disability, and he is still permanently and totally disabled. He got the required physician's statement in 1998 and kept it with his tax records. His physician signed on line B of the statement. This year James checks the box in Part II of Schedule 3. He does not need to get another statement for 2008.
He received the following income for the year:
Nontaxable social security$1,500
Interest (taxable)100
Taxable disability pension11,400
   
James' adjusted gross income is $11,500 ($11,400 + $100). He figures the credit on Schedule 3 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 2 and 3 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 Form 1040A,
line 28
246  
10.Enter any amount from Form 1040A,
line 29
-0-  
11.Subtract line 10 from line 9 246
12.Credit (Enter the smaller of
line 8 or line 11)
 $ 225
His credit is $225. He enters $225 on line 30 of Form 1040A. The Schedule 3 for James Davis is not shown.
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Example 2.(p8)

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 of last year, Helen was injured in an accident at work and retired on permanent and total disability.
William received nontaxable social security disability benefits of $3,000 during the year and a taxable disability pension of $6,200. Helen earned $10,600 from her job and received a taxable disability pension of $1,700. Their joint return on Form 1040 shows adjusted gross income of $18,500 ($6,200 + $10,600 + $1,700). They do not itemize deductions. They do not pay any real estate taxes.
Helen got her doctor to complete the physician's statement in the instructions for Schedule R. Helen is not required to include the statement with their return for the year, 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 in Part II of Schedule R and writes his first name in the space above the box on line 2.
William and Helen use Schedule R to figure their $38 credit for the elderly or the disabled. They attach Schedule R to the joint return and enter $38 on line 48 of Form 1040. See their filled-in Schedule R (Form 1040) Credit for the Elderly or the Disabled 2008 and Helen's filled-in physician's statement, later.
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Pencil
Instructions for Physician's Statement
  
TaxpayerPhysician
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, 2008      
 
Physician: Sign your name on either A or B below.
A The disability has lasted or can be expected to last continuously for at least a year                     
 Physician's signature      Date
B There is no reasonable probability that the disabled condition will ever improve      Juanita D. Doctor      2/7/09   
 Physician's signature      Date
Physician's name Physician's address
    Juanita D. Doctor 1900 Green St., Hometown, MD 20000   
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Example 3.(p8)

Jerry Ash is 68 years old and single and files Form 1040A. He received the following income for the year:
Nontaxable social security$2,000
Interest (taxable)455
Pension (all taxable)5,600
Wages from a part-time job4,645
   
Jerry's adjusted gross income is $10,700 ($4,645 + $5,600 + $455). Jerry figures the credit on Schedule 3 (Form 1040A) as follows:
1.Initial amount $5,000
2.Nontaxable social security and other nontaxable pensions$2,000  
3.Excess adjusted gross income
($10,700 − $7,500) ÷ 2
1,600  
4.Add lines 2 and 3 3,600
5.Subtract line 4 from line 1
(Do not enter less than (–0–))
 1,400
6.Multiply line 5 by 15% (.15) 210
7.Enter the amount from Form 1040A,
line 28
41  
8.Enter any amount from Form 1040A,
line 29
-0-  
9.Subtract line 8 from line 7 41
10.Credit
(Enter the smaller of line 6 or line 9)
 $ 41
Jerry's credit is $41. He files Schedule 3 (Form 1040A) and shows this amount on line 30 of Form 1040A. See the filled-in Schedule 3 (Form 1040A): Credit for the Elderly or the Disabled for Form 1040A F for Jerry Ash, later.
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