If you figure the credit yourself, fill out the front of Schedule R. Next, fill out Part III of Schedule R. If you file Form 1040A, enter the amount from Schedule R, line 24 on line 30. If you file Form 1040, include the amount from Schedule R, line 24 on line 53, check box c, and enter "Sch R" on the line next to that box.
There are five steps in Part III to determine the amount of your credit:
- Determine your initial amount (lines 10–12).
- Determine the total of any nontaxable social security and certain other nontaxable pensions and benefits you received (lines 13a, 13b, and 13c).
- Determine your excess adjusted gross income (lines 14–17).
- Determine the total of steps 2 and 3 (line 18).
- Determine your credit (lines 19–24).
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 1
. Your initial amount is on line 12.
If you are a qualified individual under age 65, your initial amount cannot be more than your taxable disability income.taxmap/pubs/p524-002.htm#en_us_publink100038702
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.
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.
- Nontaxable social security payments. This is the nontaxable part of the benefits shown in box 5 of Form SSA-1099, Social Security Benefit Statement, which includes disability benefits, 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.)
- 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.
- 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.)
- 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 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.
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:
- Subtract from your adjusted gross income (Form 1040A, line 22 or Form 1040, line 38) the amount shown for your filing status in the following list.
- $7,500 if you are single, a head of household, or a qualifying widow(er),
- $10,000 if you are married filing a joint return, or
- $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.
- 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 and Step 3.
|IF the total of |
Steps 2 and 3 is...
| 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.|
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,
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|
| || || || |
|1.||Initial amount|| ||$5,000|
|2.||Total nontaxable social security and|
other nontaxable pensions
|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 2) plus your excess adjusted gross income (line 3) is more than your initial amount (line 1).taxmap/pubs/p524-002.htm#en_us_publink100038709
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.taxmap/pubs/p524-002.htm#en_us_publink100038710
The following examples illustrate the credit for the elderly or the disabled. The initial amounts are taken from Table 1. Initial Amounts
James Davis is 58 years old, single, and files Form 1040A. In 2004 he retired on permanent and total disability, and he is still permanently and totally disabled. He got the required physician's statement in 2004 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 R. He does not need to get another statement for 2009.
He received the following income for the year:
|Nontaxable social security||$1,500|
|Taxable disability pension||11,400|
| || || |
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 |
|$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 Form 1040A, |
| 216 || || |
|10.||Enter any amount from Form 1040A, |
| -0- || || |
|11.||Subtract line 10 from line 9|| || 216 |
|12.||Credit (Enter the smaller of |
line 8 or line 11)
| || $ 216 |
His credit is $216. He enters $216 on line 30 of Form 1040A. The Schedule R for James Davis is not shown.taxmap/pubs/p524-002.htm#en_us_publink100038712
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 $2,800 during the year and a taxable disability pension of $6,200. Helen earned $11,100 from her job and received a taxable disability pension of $1,700. Their joint return on Form 1040 shows adjusted gross income of $19,000 ($6,200 + $11,100 + $1,700). They do not itemize deductions. They do not have any amounts that would increase their standard deduction.
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 $30 credit for the elderly or the disabled. They attach Schedule R to their Form 1040 and enter $30 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.
taxmap/pubs/p524-002.htm#TXMP511815e0Page 1 of Schedule R for the Whites taxmap/pubs/p524-002.htm#en_us_publink1000158408taxmap/pubs/p524-002.htm#w15046s01
|Instructions for Physician's Statement|
| || |
|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, 2009 |
| 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 2/8/10 |
| ||Physician's signature Date|
|Physician's name|| Physician's address|
| Juanita D. Doctor || 1900 Green St., Hometown, MD 20000 |