Looking for a U.s. Department Of The Treasury Forms And Templates? Download it for free!

In figuring the credit, disability income does not in-

Example 1. Sue retired on disability as a sales clerk. She

clude any amount you received from your employer's

now works as a full-time babysitter earning minimum

pension plan after you have reached mandatory retire-

wage. Although she does different work, Sue babysits on

ment age.

ordinary terms for the minimum wage. She cannot take

the credit because she is engaged in a substantial gainful

For more details on disability income, see Pub. 525.

activity.

Example 2. Mary, the president of XYZ Corporation, re-

DRAFT AS OF

Part II. Statement of Permanent

tired on disability because of her terminal illness. On her

doctor's advice, she works part-time as a manager and is

and Total Disability

paid more than the minimum wage. Her employer sets

her days and hours. Although Mary's illness is terminal

and she works part-time, the work is done at her employ-

If you checked box 2, 4, 5, 6, or 9 in Part I and you did

August 14, 2015

er's convenience. Mary is considered engaged in a sub-

not file a physician's statement for 1983 or an earlier

stantial gainful activity and cannot take the credit.

year, or you filed or got a statement for tax years after

1983 and your physician signed on line A of the state-

Example 3. John, who retired on disability, took a job

ment, you must have your physician complete a state-

with a former employer on a trial basis. The purpose of

ment certifying that:

the job was to see if John could do the work. The trial pe-

You were permanently and totally disabled on the

riod lasted for some time during which John was paid at a

date you retired, or

rate equal to the minimum wage. But because of John's

If you retired before 1977, you were permanently

disability, he was given only light duties of a nonproduc-

and totally disabled on January 1, 1976, or January 1,

tive, make-work nature. Unless the activity is both sub-

1977.

stantial and gainful, John is not engaged in a substantial

gainful activity. The activity was gainful because John

You do not have to file this statement with your tax re-

was paid at a rate at or above the minimum wage. How-

turn. But you must keep it for your records. You can use

ever, the activity was not substantial because the duties

the physician's statement later in these instructions for

were of a nonproductive, make-work nature. More facts

this purpose. Your physician should show on the state-

are needed to determine if John is able to engage in a

ment if the disability has lasted or can be expected to last

substantial gainful activity.

continuously for at least a year, or if there is no reasona-

Disability Income

ble probability that the disabled condition will ever im-

prove. If you file a joint return and you checked box 5 in

Generally, disability income is the total amount you were

Part I, you and your spouse must each get a statement.

paid under your employer's accident and health plan or

pension plan that is included in your income as wages or

If you filed a physician's statement for 1983 or an ear-

payments instead of wages for the time you were absent

lier year, or you filed or got a statement for tax years af-

from work because of permanent and total disability.

ter 1983 and your physician signed on line B of the state-

However, any payment you received from a plan that

ment, you do not have to get another statement for 2015.

does not provide for disability retirement is not disability

But you must check the box on line 2 in Part II to certify

income.

all three of the following.

Income Limits for the Credit for the Elderly or the Disabled

THEN you generally cannot take the credit if:

The amount on Form 1040A, line 22, or

IF you are . . .

Form 1040, line 38, is . . .

Or you received . . .

Single, head of household, or qualifying

$17,500 or more

$5,000 or more of nontaxable social security

widow(er) with dependent child

or other nontaxable pensions, annuities, or

disability income

Married filing jointly and only one spouse is

$20,000 or more

$5,000 or more of nontaxable social security

eligible for the credit

or other nontaxable pensions, annuities, or

disability income

Married filing jointly and both spouses are

$25,000 or more

$7,500 or more of nontaxable social security

eligible for the credit

or other nontaxable pensions, annuities, or

disability income

Married filing separately and you lived apart

$12,500 or more

$3,750 or more of nontaxable social security

from your spouse for all of 2015

or other nontaxable pensions, annuities, or

disability income

R-2

Form 1040a Or 1040(Draft) - Instructions For Schedule R - Credit For The Elderly Or The Disabled (2015) Page 3

Related Articles

Related forms

Related Categories