Credit for the Elderly or Disabled 2023 - 2024

Credit for the Elderly or Disabled is a tax credit, which means that it lowers your total tax liability dollar for dollar. The IRS provides a maximum credit of $7,500. It is available to individuals who are either above age 65 or have a permanent and total disability and have taxable disability income. The credit must be claimed by filing a federal return on Form R. For more information on this credit, see IRS Publication 524, Credit for the Elderly or Disabled. it may be helpful to consult a local tax professional who can help guide an individual through the process. Some states also offer their own forms of senior tax credits and exemptions that can provide additional savings to an aging adult. For example, California offers a Senior Head of Household Credit, and Massachusetts offers a Circuit Breaker Tax Credit.

The credit is figured on IRS Schedule R, which can be found in the Forms and Publications section of the IRS website. The first part of Schedule R asks about your age or disability status. The answers to this question determine which section of the form you will complete next.

How to Qualify for The Elderly Or Disabled Credit?

To qualify for the Credit for the Elderly or Disabled, you must have a minimum of $15,500 in taxable disability income. This includes payments from an employer’s disability insurance or workers’ compensation program but not amounts received as a lump-sum payment for accrued annual leave under a plan that does not provide for disability retirement. Also, the credit doesn’t apply to amounts that are treated as wages for Social Security purposes.

You must be a U.S. citizen or resident alien, and you must be over the age of 65 or permanently and totally disabled when you file your return. Married individuals who file joint returns must both meet these criteria. However, if one spouse meets the eligibility requirements, but the other does not, only the spouse who is over the age of 65 or permanently and totally disable can claim this credit.

How to Claim Elderly or Disabled Credit?

The credit has limits based on your filing status, and total of taxable disability income, and nontaxable pension and annuity payments. To determine your eligibility, start with the predetermined amount in Part 1 of the form and subtract from it the sum of your taxable disability income. Add to this the sum of your nontaxable Social Security benefits, other nontaxable pensions and annuities, and any other taxable retirement income you or your spouse receives. Then multiply this by 15 percent to find your credit. You can claim the credit by attaching Schedule R to your tax return (married and file separately). The Elderly or Disabled Credit can be claimed on Form 1040, as well. Married couples filing a joint return must file the same return unless one spouse meets the special rules for married couples who live apart during the year (Code Sec. 22).