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Can I deduct the Elderly or Disabled Credit on my tax
return?
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| 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, 2011; or |
| you were under age 65 at the end of
2010, you retired before the end of 2010 because of
permanent and total disability and you received taxable disability income in
2010 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
2010 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.
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Related tax
information about the Elderly or Disabled Credit |
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| Tax Credits |
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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, Your Federal
Income Tax. |
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Ask Julian Block your IRS and tax questions! |
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If you can't find the answer to your IRS or tax question in our
web you can call former IRS Special Agent and one of the country's foremost tax attorneys, nationally syndicated columnist ("The Tax
Adviser") Julian Block. Julian is also the tax Editor of Mutual Funds Magazine, America's premier investment magazine. To
call Julian for a tax consultation click
here. |
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