Posted by Fred Lake

Are You Eligible for the Tax credit for the elderly or disabled?

Are You Eligible for the Tax credit for the elderly or disabled?


For people over the age of 65 or those into retirement as a result of disability, they might be eligible for a clear tax credit targeted at the seniors and disabled of the country.

It is better than a deduction because they can have as much as $7,500 off their tax bills. Note that the deduction only reduces your tax bill in proportion to your tax rate.

There are two distinct sets of criteria that qualify one for the deduction: the income criteria and the age or disability criteria. The next section will shed light on what each criterion entails.

Age/Disability Criteria

For you to meet this specific criterion, you must be 65 years old, at least. Besides, you must meet any of the three conditions:

  • Your retirement is linked to a disability

  • You accepted taxable disability income for the previous tax year

  • As of Jan 1, 2020, you are not at the specified retirement age set forth by your employer.

There should be a statement from a doctor certifying that you are no longer fit for any productive activity. This is essential to qualify you for the disability criteria. The inactivity must be linked to a mental or physical condition. This is also the case if you have had that condition for at least 12 months or might probably do. Again, if the situation could result in death, the condition holds.

Income Criteria

To qualify for the income criteria, the sum of your pension annuity, non-taxable disability income, and social security income must be below the benchmark. The benchmarks are available in IRS publication 524v- Credit for the Disabled or Elderly. 

The Adjusted Gross Income has its limit ranging from $12,500 to $25,000. For non-taxable income paths, the range is from $3,750 to $7,500.

Calculating the Credit

There is an instruction in IRS publication 524. This contains the guidelines with which you can complete schedule R. This is because filing out schedule R helps determine if you qualify for the tax credit. 

There are three separate sections in Schedule R explained below:

  • For the first part, you choose the box that has to do with your filing status, disability level, and age. The box shows the starting amount of your credit, which could be $3,750, $5,000, or $7,500.

  • If your qualification is due to a disability, you will need this part rather than the age. However, you need to provide a statement of disability from a doctor – permanent and total disability. 

  • For the third part, you can access many adjustments to your credit, depending on your status and source of income.

On calculating the credit, fill in the credit value in line 54 of Schedule 3. You will have to attach this to Form 1040 alongside the Schedule R form, all connected to the tax form. On line 54, select box "C" and fill in "Schedule R" in the adjacent blank.

Bear in mind that the Senior Tax Credit for the Elderly and Disabled is non-refundable. The implication of this is that you will not get massive credit for any other tax you owe, even though you qualify for a more massive loan.

The good news for many is that the IRS can help calculate this credit for many that find the instruction overwhelming. For every part in schedule 1 that applies to you, check the box. Fill out part 1 and 2 if applicable. For part three, fill out any relevant income in lines 11, 13a, and 13b.

On the other side, there is an option to file your tax electronically with the tax software, which will generate your tax credit automatically for you. There is also an IRS Free file system if your income is less than $66,000.

For people that believe that they are eligible for the Senior Tax Credit for the Elderly and Disabled, reviewing Publication 524 can help you decide if you will save money on tax. Always seize every opportunity to bring down your tax bill.



Fred Lake
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