IRS grants credit for the disabled
By Herb Drill
WASHINGTON - Would you believe you can get something good from the Internal Revenue Service?
Here’s how it works. According to the IRS, you could take the Credit for the Elderly or the Disabled if you were age 65 or older on Dec. 31, 2004, or if you’re retired on permanent and total disability. Like any other tax credit, it’s a dollar-for-dollar reduction of your tax bill. The maximum amount of this credit is $1,125.
You can take the credit for the elderly or the disabled if:
· You are a qualified individual.
· Your adjusted gross income is less than $12,500 to $25,000 (depending on your filing status).
· Your nontaxable income from Social Security or other nontaxable pension is less than $3,750 to $7,500 (also depending on your filing status).
Generally, you’re a qualified individual for this credit if you’re a U.S. citizen or resident at the end of the tax year and you’re 65 or older, or you’re under 65, retired on permanent and total disability, received taxable disability income, and didn’t reach mandatory retirement age before the beginning of the tax year.
If you’re not 65, you can qualify for the credit only if you’re retired on permanent and total disability. This means you were permanently and totally disabled when you retired, and you retired on disability before the end of the tax year. Even if you don’t retire formally, you’re considered retired on disability when you have stopped working because of your disability.
If you’re under 65, you must have your physician complete a statement certifying you were disabled permanently and totally on the date you retired. You don’t have to file this statement with your tax return, but you must keep it for your records.
The IRS says you should use Schedule R of Form 1040 or Schedule 3 of Form 1040A to compute the credit. You can’t take the credit if you file Form 1040EZ.
For more information, see IRS Publication 524 - Credit for the Elderly or the Disabled. The publication, forms, and schedules are available on www.irs.gov, or call the IRS toll-free at 1-800- 829-3676.
Here are some helpful links:
· Publication 524 - Credit for the Elderly or the Disabled, www.irs.gov/pub/irs-pdf/p524.pdf.
· Schedule R (Form 1040), Credit for the Elderly or the Disabled, www.irs.gov/pub/irs-pdf/f1040sr.pdf.
· Schedule R Instructions, www.irs.gov/pub/irs-pdf/i1040sr.pdf.
· Schedule 3 - Credit for the Elderly or the Disabled for Form 1040A filers, www.irs.gov/pub/irs-pdf/f1040as3.pdf.
· Schedule 3 instructions, www.irs.gov/pub/irs-pdf/i1040as3.pdf.
· Tax Topic 603 - www.irs.gov/taxtopics/tc603.html.