How to Claim the Elderly or Disabled Credit

You can claim a credit against income taxes if you are a low-income taxpayer who is 65 or over or permanently disabled. Relatively few people can receive this complicated tax credit due to income limits.

Difficulty: Moderately challenging

Instructions

Things You'll Need:

• Financial Statements
• Financial Calculator
• Paper And Pencils
• Computers
• Tax Preparation Software

Qualified Individual

1. Verify that you are a U.S. citizen or resident.

2. Verify that, during the tax year, you were 65 or older.

3. Or determine that, during the tax year, you were under 65, retired on total and permanent disability, received a taxable disability income, and had not yet reached the mandatory retirement age set by your employer.

Income Limits

4. Determine that your filing status is single, head of household or qualifying widow(er); your adjusted gross income is $17,500 or less; and your non-taxable pension or non-taxable Social Security is $5,000 or less.

5. Or determine that your filing status is married filing jointly, both spouses are qualifying individuals, your adjusted gross income is $25,000 or less, and your non-taxable pension or non-taxable Social Security is $7,500 or less.

6. Or determine that your filing status is married filing jointly, only one spouse is a qualifying individual, your adjusted gross income is $20,000 or less, and your non-taxable pension or non-taxable Social Security is $5,000 or less.

7. Or determine that your filing status is married filing separately, you didn't live with your spouse during the tax year, your adjusted gross income is $12,500 or less, and your non-taxable pension or non-taxable Social Security is $3,750 or less.

Figuring Your Credit

8. Obtain Schedule 3 if you are using the 1040A, or obtain Schedule R if you are using the 1040.

9. Check the appropriate box in Part I of Schedule 3 or Schedule R. This states your age or disability qualification.

10. Read Part II of Schedule 3 or Schedule R if you are disabled. This concerns the physician's statement. It's simple. You may need to check the box.

11. Fill in line 11 of Schedule 3 or Schedule R if you are disabled. You must state how much you received in taxable disability income.

12. Fill in line 13 of Schedule 3 or Schedule R. You must state how much you received in non-taxable pensions or non-taxable Social Security benefits.

13. Write "CFE" on the line in the "Tax and Credits" section of the 1040, or on the line in the "Tax, credit and payments" section of the 1040A, which says "Credit for the elderly or the disabled." Attach the Schedule 3 to your 1040A, or attach the Schedule R to your 1040, and the IRS will calculate your credit for you.

14. Or complete the rest of the Schedule 3 or Schedule R, and send the schedule in with your 1040A or 1040.

Tips & Warnings

• If you simply follow the steps on the Schedule 3 or Schedule R, you should be able to complete it without difficulty. However, if you try to understand the meaning of these steps, you are likely to become very confused.
• The maximum credit is $1,125.
• Some professional tax preparers never even consider this tax credit, because it is complicated and uncommon. If you think you may qualify, insist that your tax preparer complete a Schedule 3 or Schedule R and show you the results.