Can I deduct the Elderly or Disabled Credit on my tax return?

Generally, if you were age 65 or older or disabled and your income and nontaxable social security or other nontaxable pension are below specified amounts, you may be able to deduct the elderly or disabled credit on your tax return.

You must meet one of the following conditions to deduct the elderly or disabled credit on your tax return:

	your 65th birthday is on or before January 1, 2007; or
	you were under age 65 at the end of 2006, you retired before the end of 2006 because of permanent and total disability and you received taxable disability income in 2006 from your former employer's disability plan. Qualifying disability income does not include payments received after reaching mandatory retirement age.

The elderly or disabled credit is 15% of the base amount after reductions.

The initial base amounts for the elderly or disabled credit are:

	$5,000 if you file your tax return as single, head of household, or qualifying widow(er);
	$5,000 if you file a joint tax return and only one spouse is eligible for the elderly or disabled credit;
	$7,500 if you file a joint tax return and both spouses are eligible for the elderly or disabled credit. Only one $7,500 base may be claimed for both spouses;
	$3,750 if you are married filing a separate tax return;
	if you are under age 65 and totally and permanently disabled the base amount for calculating the elderly or disabled credit is the lower of your 2006 disability income or the initial base amount for your tax return filing status shown above.

The base amounts for the elderly or disabled credit are reduced by:

	Social Security and Railroad Retirement benefits which are not taxable;
	tax free pension, annuity, and disability income paid under a law administered by the Veterans' Administration or under other federal laws;
	one half of adjusted gross income exceeding: $7,500 if you file your tax return as single, head of household, or qualifying widow(er); $10,000 if you are married and file a joint tax return; $5,000 if you are married, live apart from your spouse for the entire tax year, and file a separate tax return.

Consequently, regardless of non taxable Social Security, Railroad Retirement, and the aforementioned tax free pension, annuity, and disability income benefits, the elderly or disabled credit is no longer available to the following:

	single tax return filers when adjusted gross income (AGI) reaches $17,500;
	on a joint tax return where only one spouse is eligible for the elderly or disabled credit, $20,000;
	$25,000 on a joint tax return where both spouses are eligible for the elderly or disabled credit; and
	$12,500 for married persons filing separate tax returns.

The base amounts for the elderly or disabled credit are not reduced by:

	military disability pensions received for active service in the Armed Forces, Coast Guard, Geodetic Survey, or Public Health Service;
	some disability annuities paid under the Foreign Service Act of 1980; and
	workers' compensation benefits, unless Social Security benefits are reduced by workers' compensation benefits in which case that amount of workers' compensation benefits is treated as Social Security benefits that reduce the base.

Special elderly or disabled credit tax rules apply for nonresident aliens, married taxpayers filing separate tax returns, and disabled persons.

Related tax information about the Elderly or Disabled Credit

Tax Directory Topics:
Tax Credits

IRS publications about the Elderly or Disabled Credit:
For more details, refer to Tax Topic 603, Credit for the Elderly or the Disabled, or IRS Publication 524,

Credit for the Elderly or the Disabled. Also see IRS Publication 17,

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