Instructions For Schedule R (Form 1040a Or 1040)

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

widow(er) with dependent child

security or other nontaxable pensions,

annuities, or disability income

Married filing jointly and only one spouse

$20,000 or more

$5,000 or more of nontaxable social

is eligible for the credit

security 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

eligible for the credit

security or other nontaxable pensions,

annuities, or disability income

Married filing separately and you lived

$12,500 or more

$3,750 or more of nontaxable social

apart from your spouse for all of 2012

security or other nontaxable pensions,

annuities, or disability income

and total disability. However, any payment you re-

Example 1. Sue retired on disability as a sales

ceived from a plan that does not provide for disabili-

clerk. She now works as a full-time babysitter earn-

ty retirement is not disability income.

ing minimum wage. Although she does different

work, Sue babysits on ordinary terms for the mini-

In figuring the credit, disability income does not

mum wage. She cannot take the credit because she is

include any amount you received from your employ-

engaged in a substantial gainful activity.

er's pension plan after you have reached mandatory

retirement age.

Example 2. Mary, the president of XYZ Corpora-

tion, retired on disability because of her terminal ill-

For more details on disability income, see Pub.

ness. On her doctor's advice, she works part time as

525.

a manager and is paid more than the minimum wage.

Her employer sets her days and hours. Although

Part II. Statement of Permanent

Mary's illness is terminal and she works part time,

the work is done at her employer's convenience.

and Total Disability

Mary is considered engaged in a substantial gainful

activity and cannot take the credit.

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

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

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

job with a former employer on a trial basis. The pur-

earlier year, or you filed or got a statement for tax

pose of the job was to see if John could do the work.

years after 1983 and your physician signed on line A

The trial period lasted for some time during which

of the statement, you must have your physician com-

John was paid at a rate equal to the minimum wage.

plete a statement certifying that:

But because of John's disability, he was given only

You were permanently and totally disabled on

light duties of a nonproductive, make-work nature.

the date you retired, or

Unless the activity is both substantial and gainful,

If you retired before 1977, you were permanent-

John is not engaged in a substantial gainful activity.

ly and totally disabled on January 1, 1976, or Janu-

The activity was gainful because John was paid at a

ary 1, 1977.

rate at or above the minimum wage. However, the

You do not have to file this statement with your

activity was not substantial because the duties were

tax return. But you must keep it for your records.

of a nonproductive, make-work nature. More facts

You can use the physician's statement later in these

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

instructions for this purpose. Your physician should

substantial gainful activity.

show on the statement if the disability has lasted or

Disability Income

can be expected to last continuously for at least a

year, or if there is no reasonable probability that the

Generally, disability income is the total amount you

disabled condition will ever improve. If you file a

were paid under your employer's accident and health

joint return and you checked box 5 in Part I, you and

plan or pension plan that is included in your income

your spouse must each get a statement.

as wages or payments instead of wages for the time

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

you were absent from work because of permanent

earlier year, or you filed or got a statement for tax

R-2

Instructions For Schedule R (Form 1040a Or 1040) - 2012 Page 2

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