Instructions For Schedule 3 (Form 1040a) - 2003 (Page 2 of 4) in pdf

What Is Permanent and Total Disability?

pension plan after you have reached mandatory retirement

age.

A person is permanently and totally disabled if both 1

and 2 below apply.

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

1. He or she cannot engage in any substantial gainful

activity because of a physical or mental condition.

Part II

2. A physician determines that the condition has lasted

Statement of Permanent and Total

or can be expected to last continuously for at least a year

or can lead to death.

Disability

Examples 1 and 2 below show situations in which the

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

individuals are considered engaged in a substantial gainful

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

activity. Example 3 shows a person who might not be

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

considered engaged in a substantial gainful activity. In

1983 and your physician signed on line A of the

each example, the person was under age 65 at the end of

statement, you must have your physician complete a

the year.

statement certifying that:

•

Example 1.

Sue retired on disability as a sales clerk. She

You were permanently and totally disabled on the

now works as a full-time babysitter at the minimum

date you retired or

wage. Although she does different work, Sue babysits on

•

If you retired before 1977, you were permanently

ordinary terms for the minimum wage. She cannot take

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

the credit because she is engaged in a substantial gainful

1977.

activity.

You do not have to file this statement with your Form

Example 2.

Mary, the president of XYZ Corporation,

1040A. But you must keep it for your records. You may

retired on disability because of her terminal illness. On

use the physician’s statement on page 4 for this purpose.

her doctor’s advice, she works part time as a manager

Your physician should show on the statement if the

and is paid more than the minimum wage. Her employer

disability has lasted or can be expected to last

sets her days and hours. Although Mary’s illness is

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

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

reasonable probability that the disabled condition will

employer’s convenience. Mary is considered engaged in a

ever improve. If you file a joint return and you checked

substantial gainful activity and cannot take the credit.

box 5 in Part I, you and your spouse must each get a

Example 3.

John, who retired on disability, took a job

statement.

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

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

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

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

period lasted for some time during which John was paid

after 1983 and your physician signed on line B of the

at a rate equal to the minimum wage. But because of

statement, you do not have to get another statement for

John’s disability, he was given only light duties of a

2003. But you must check the box on line 2 in Part II to

nonproductive, make-work nature. Unless the activity is

certify all three of the following.

both substantial and gainful, John is not engaged in a

substantial gainful activity. The activity was gainful

1. You filed or got a physician’s statement in an

because John was paid at a rate at or above the minimum

earlier year.

wage. However, the activity was not substantial because

2. You were permanently and totally disabled during

the duties were of a nonproductive, make-work nature.

2003.

More facts are needed to determine if John is able to

3. You were unable to engage in any substantial

engage in a substantial gainful activity.

gainful activity during 2003 because of your physical or

Disability Income

mental condition.

Generally, disability income is the total amount you were

If you checked box 4, 5, or 6 in Part I, enter in the

paid under your employer’s accident and health plan or

space above the box on line 2 in Part II the first name(s)

pension plan that is included in your income as wages or

of the spouse(s) for whom the box is checked.

payments instead of wages for the time you were absent

from work because of permanent and total disability.

If the Department of Veterans Affairs (VA) certifies

However, any payment you received from a plan that

that you are permanently and totally disabled, you can

does not provide for disability retirement is not disability

use VA Form 21-0172 instead of the physician’s

income.

statement. VA Form 21-0172 must be signed by a person

In figuring the credit, disability income does not

authorized by the VA to do so. You can get this form

include any amount you received from your employer’s

from your local VA regional office.

Sch. 3-2

Instructions For Schedule 3 (Form 1040a) - 2003 Page 2

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