Menu 
Share Button

Elderly or Disabled Credit


The Credit for the Elderly or Disabled is a nonrefundable tax credit that is available to qualifying individuals who are over the age 65 or who are disabled.

Qualified Individual

You are a qualified individual for this credit if you are a U.S. citizen or resident alien, and either of the following applies.

  • You were age 65 or older at the end of year.
  • You were under age 65 at the end of year and all three of the following statements are true.
    • You retired on permanent and total disability (explained later).
    • You received taxable disability income for the year.
    • On January 1, you had not reached mandatory retirement age

Qualifying Disability Income

  • The income is paid under your employer’s accident, health, or pension plan.
  • The income is included in your income as wages, or instead of wages, during the time you are absent from work due to permanent and total disability.

Non-Qualifying Disability Income

  • Payments received from a plan that does not provide disability retirement.
  • Lump-sum payments for accrued annual leave that you received when retiring on disability.
  • Amounts that are received after reaching your employer’s mandatory retirement age, at which you would have retired if you had not become disabled.

U.S. Citizen or Resident Alien

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.

Exceptions:

You may be able to take the credit if you are a nonresident alien who is married to a U.S. citizen or resident alien at the end of the tax year and you and your spouse choose to treat you as a U.S. resident alien. If you make that choice, both you and your spouse are taxed on your worldwide incomes.

If you were a nonresident alien at the beginning of the year and a resident alien at the end of the year, and you were married to a U.S. citizen or resident alien at the end of the year, you may be able to choose to be treated as a U.S. resident alien for the entire year. In that case, you may be allowed to take the credit.


Married Persons

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.

Head of household:

You can file as head of household and qualify to take the credit, even if your spouse lived with you during the first 6 months of the year, if you meet all the following tests:

  • You file a separate return.
  • You paid more than half the cost of keeping up your home during the tax year.
  • 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.
  • Your home was the main home of your child, stepchild, or an eligible foster child for more than half the year.
  • 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.

Under Age 65

If you are under age 65 at the end of year, 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:

  • You were permanently and totally disabled when you retired, and
  • 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.


Permanent and total disability

You are permanently and totally disabled if you cannot engage in any substantial gainful activity because of your physical or mental condition. A qualified physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death.


Forms

Publication 554 – Tax Guide for Seniors

Share Button