This form is designed for individuals who are either 65 or older, or those under 65 who are permanently and totally disabled. The purpose of this credit is to decrease the tax burden for these groups.
*We do not support Schedule R, Credit for the Elderly or the Disabled.
You qualify as disabled if you were under 65 at the end of the tax year and all three of the following statements are true:
- You were permanently and totally disabled on the date you retired.
- You receive taxable disability income for the tax year.
- On January 1 of the tax year, you had not reached mandatory retirement age (the age at which your employer's retirement program would have required you to retire).
It's worth noting that "permanently and totally disabled" means that you can't engage in any substantial gainful activity because of a physical or mental condition, and a physician certifies that this condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to lead to death.
Part I: This is where we determine if you're eligible for the credit. There are certain age and disability requirements, and you also have to fall under certain income limits. If you're married and filing jointly, both you and your spouse's age/disability status can affect eligibility.
Part II: A statement of permanent and total disability. It asks for confirmation that due to your continued disabled condition, you were unable to engage in any substantial gainful activity in the tax year.
Part III: If you're eligible, this is where you'll see calculations of the initial amount of your credit. The amount is based on your filing status and income. Adjustments to the initial amount will be based on nontaxable social security, pensions, annuities, or disability income. The more nontaxable income you have, the smaller your credit might be and your credit can't be more than your tax liability.
This credit is reported on your Form 1040 and could potentially reduce your tax bill, giving you a larger refund or reducing the amount you owe.