Instructions for IRS Form 1040 Schedule R - Credit for the Elderly or the Disabled 2018

September 27, 2018 "Instructions For Irs Form 1040 Schedule R - Credit For The Elderly Or The Disabled" contain the updated filing procedures for the IRS-issued Form 1040. Download your copy of the instructions by clicking the link below.

IRS Form 1040 is tax form released and collected by the Internal Revenue Service of the United States.

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Department of the Treasury
Internal Revenue Service
2018 Instructions for Schedule R
(Form 1040)
Credit for the
Use Schedule R (Form 1040) to figure the credit for the elderly or the disa-
bled.
Elderly or the
Future developments. For the latest information about developments related
to Schedule R (Form 1040) and its instructions, such as legislation enacted af-
Disabled
ter they were published, go to IRS.gov/ScheduleR.
Additional information. See Pub. 524 for more details.
Married Persons Filing Separate
Who Can Take the Credit
Returns
The credit is based on your filing status, age, and income.
If your filing status is married filing separately and you
If you are married and filing a joint return, it is also based
lived with your spouse at any time during 2018, you can't
on your spouse's age and income. You may be able to
take the credit.
take this credit if either of the following applies.
Nonresident Aliens
1. You were age 65 or older at the end of 2018, or
If you were a nonresident alien at any time during 2018,
2. You were under age 65 at the end of 2018 and you
you may be able to take the credit only if your filing sta-
meet all of the following.
tus is married filing jointly.
a. You were permanently and totally disabled on the
Income Limits
date you retired. If you retired before 1977, you must
have been permanently and totally disabled on January 1,
See
Income Limits for the Credit for the Elderly or the
1976, or January 1, 1977.
Disabled.
b. You received taxable disability income for 2018.
Want the IRS To Figure Your Credit?
c. On January 1, 2018, you hadn't reached mandatory
retirement age (the age when your employer's retirement
If you can take the credit and you want us to figure it for
program would have required you to retire).
you, check the box in Part I of Schedule R (Form 1040)
for your filing status and age. Fill in Part II and lines 11
For the definition of permanent and total disability, see
and 13 of Part III if they apply to you. Then, check box c
What Is Permanent and Total
Disability. Also, see the in-
on Schedule 3 (Form 1040), line 54, and enter “CFE” on
structions for
Part II. Statement of Permanent and Total
the line next to that box. Attach Schedule R (Form 1040)
Disability.
to your return.
Age 65
What Is Permanent and Total
You are considered age 65 on the day before your 65th
Disability?
birthday. As a result, if you were born on January 1,
A person is permanently and totally disabled if both 1
1954, you are considered to be age 65 at the end of 2018.
and 2 below apply.
Death of taxpayer. If you are preparing a return for
1. He or she can't engage in any substantial gainful
someone who died in 2018, consider the taxpayer to be
activity because of a physical or mental condition.
age 65 at the end of 2018 if he or she was age 65 or older
on the day before his or her death. For example, if the
2. A qualified physician determines that the condition
taxpayer was born on February 14, 1953, and died on
has lasted or can be expected to last continuously for at
February 13, 2018, the taxpayer is considered age 65 at
least a year or can be expected to result in death.
the time of death. However, if the taxpayer died on Feb-
Examples 1 and 2, next, show situations in which the
ruary 12, 2018, the taxpayer isn’t considered age 65 at
individuals are considered engaged in a substantial gain-
the time of death.
ful activity. Example 3 shows a person who might not be
considered engaged in a substantial gainful activity. In
each example, the person was under age 65 at the end of
the year.
R-1
Aug 08, 2018
Cat. No. 11357O
Department of the Treasury
Internal Revenue Service
2018 Instructions for Schedule R
(Form 1040)
Credit for the
Use Schedule R (Form 1040) to figure the credit for the elderly or the disa-
bled.
Elderly or the
Future developments. For the latest information about developments related
to Schedule R (Form 1040) and its instructions, such as legislation enacted af-
Disabled
ter they were published, go to IRS.gov/ScheduleR.
Additional information. See Pub. 524 for more details.
Married Persons Filing Separate
Who Can Take the Credit
Returns
The credit is based on your filing status, age, and income.
If your filing status is married filing separately and you
If you are married and filing a joint return, it is also based
lived with your spouse at any time during 2018, you can't
on your spouse's age and income. You may be able to
take the credit.
take this credit if either of the following applies.
Nonresident Aliens
1. You were age 65 or older at the end of 2018, or
If you were a nonresident alien at any time during 2018,
2. You were under age 65 at the end of 2018 and you
you may be able to take the credit only if your filing sta-
meet all of the following.
tus is married filing jointly.
a. You were permanently and totally disabled on the
Income Limits
date you retired. If you retired before 1977, you must
have been permanently and totally disabled on January 1,
See
Income Limits for the Credit for the Elderly or the
1976, or January 1, 1977.
Disabled.
b. You received taxable disability income for 2018.
Want the IRS To Figure Your Credit?
c. On January 1, 2018, you hadn't reached mandatory
retirement age (the age when your employer's retirement
If you can take the credit and you want us to figure it for
program would have required you to retire).
you, check the box in Part I of Schedule R (Form 1040)
for your filing status and age. Fill in Part II and lines 11
For the definition of permanent and total disability, see
and 13 of Part III if they apply to you. Then, check box c
What Is Permanent and Total
Disability. Also, see the in-
on Schedule 3 (Form 1040), line 54, and enter “CFE” on
structions for
Part II. Statement of Permanent and Total
the line next to that box. Attach Schedule R (Form 1040)
Disability.
to your return.
Age 65
What Is Permanent and Total
You are considered age 65 on the day before your 65th
Disability?
birthday. As a result, if you were born on January 1,
A person is permanently and totally disabled if both 1
1954, you are considered to be age 65 at the end of 2018.
and 2 below apply.
Death of taxpayer. If you are preparing a return for
1. He or she can't engage in any substantial gainful
someone who died in 2018, consider the taxpayer to be
activity because of a physical or mental condition.
age 65 at the end of 2018 if he or she was age 65 or older
on the day before his or her death. For example, if the
2. A qualified physician determines that the condition
taxpayer was born on February 14, 1953, and died on
has lasted or can be expected to last continuously for at
February 13, 2018, the taxpayer is considered age 65 at
least a year or can be expected to result in death.
the time of death. However, if the taxpayer died on Feb-
Examples 1 and 2, next, show situations in which the
ruary 12, 2018, the taxpayer isn’t considered age 65 at
individuals are considered engaged in a substantial gain-
the time of death.
ful activity. Example 3 shows a person who might not be
considered engaged in a substantial gainful activity. In
each example, the person was under age 65 at the end of
the year.
R-1
Aug 08, 2018
Cat. No. 11357O
Income Limits for the Credit for the Elderly
ever, the activity wasn't substantial because the duties
were of a nonproductive, make-work nature. More facts
or the Disabled
are needed to determine if John is able to engage in a
substantial gainful activity.
THEN you generally can't take the credit
Disability Income
if:
The amount on
Generally, disability income is the total amount you were
Form 1040, line 7
paid under your employer's accident and health plan or
IF you are . . .
is . . .
Or you received . . .
pension plan that is included in your income as wages or
payments instead of wages for the time you were absent
Single, head of
$17,500 or more
$5,000 or more of
from work because of permanent and total disability.
household, or
nontaxable social
However, any payment you received from a plan that
qualifying widow(er)
security or other
doesn't provide for disability retirement isn't disability in-
nontaxable pensions,
annuities, or
come.
disability income
In figuring the credit, disability income doesn't include
Married filing jointly
$20,000 or more
$5,000 or more of
any amount you received from your employer's pension
and only one spouse
nontaxable social
plan after you have reached mandatory retirement age.
is eligible for the
security or other
credit
nontaxable pensions,
For more details on disability income, see Pub. 525.
annuities, or
disability income
Part II. Statement of Permanent
Married filing jointly
$25,000 or more
$7,500 or more of
and Total Disability
and both spouses are
nontaxable social
eligible for the credit
security or other
nontaxable pensions,
If you checked box 2, 4, 5, 6, or 9 in Part I and you didn't
annuities, or
file a physician's statement for 1983 or an earlier year, or
disability income
you filed or got a statement for tax years after 1983 and
Married filing
$12,500 or more
$3,750 or more of
your physician signed on line A of the statement, you
separately and you
nontaxable social
must have your physician complete a statement certifying
lived apart from your
security or other
that:
spouse for all of 2018
nontaxable pensions,
You were permanently and totally disabled on the
annuities, or
date you retired, or
disability income
If you retired before 1977, you were permanently
and totally disabled on January 1, 1976, or January 1,
1977.
Example 1. Sue retired on disability as a sales clerk. She
now works as a full-time babysitter earning minimum
You don't have to file this statement with your tax re-
wage. Although she does different work, Sue babysits on
turn. But you must keep it for your records. You can use
ordinary terms for the minimum wage. She can't take the
the physician's statement later in these instructions for
credit because she is engaged in a substantial gainful ac-
this purpose. Your physician should show on the state-
tivity.
ment if the disability has lasted or can be expected to last
Example 2. Mary, the president of XYZ Corporation, re-
continuously for at least a year, or if there is no reasona-
tired on disability because of her terminal illness. On her
ble probability that the disabled condition will ever im-
doctor's advice, she works part-time as a manager and is
prove. If you file a joint return and you checked box 5 in
paid more than the minimum wage. Her employer sets
Part I, you and your spouse must each get a statement.
her days and hours. Although Mary's illness is terminal
If you filed a physician's statement for 1983 or an ear-
and she works part-time, the work is done at her employ-
lier year, or you filed or got a statement for tax years af-
er's convenience. Mary is considered engaged in a sub-
ter 1983 and your physician signed on line B of the state-
stantial gainful activity and can't take the credit.
ment, you don't have to get another statement for 2018.
Example 3. John, who retired on disability, took a job
But you must check the box on line 2 in Part II to certify
with a former employer on a trial basis. The purpose of
all three of the following.
the job was to see if John could do the work. The trial pe-
1. You filed or got a physician's statement in an earli-
riod lasted for some time during which John was paid at a
er year.
rate equal to the minimum wage. But because of John's
disability, he was given only light duties of a nonproduc-
2. You were permanently and totally disabled during
tive, make-work nature. Unless the activity is both sub-
2018.
stantial and gainful, John isn't engaged in a substantial
3. You were unable to engage in any substantial gain-
gainful activity. The activity was gainful because John
ful activity during 2018 because of your physical or men-
was paid at a rate at or above the minimum wage. How-
tal condition.
R-2
Credit Limit Worksheet—Line 21
Keep for Your Records
Use this worksheet to figure your credit limit.
1. Enter the amount from Form 1040, line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter the amount from Schedule 3 (Form 1040), lines 48 and 49 . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Subtract line 2 from line 1. Enter this amount on Schedule R (Form 1040), line 21. But if
zero or less, STOP, you can't take this credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
Lines 13a Through 18
If you checked box 4, 5, or 6 in Part I, enter in the
space above the box on line 2 in Part II the first name(s)
The amount on which you figure your credit can be re-
of the spouse(s) for whom the box is checked.
duced if you received certain types of nontaxable pen-
If the Department of Veterans Affairs (VA) certifies
sions, annuities, or disability income. The amount can al-
that you are permanently and totally disabled, you can
so be reduced if your adjusted gross income is over a cer-
use VA Form 21-0172 instead of the physician's state-
tain amount, depending on which box you checked in
ment. VA Form 21-0172 must be signed by a person au-
Part I.
thorized by the VA to do so. You can get this form from
Line 13a. Enter any social security benefits (before de-
your local VA regional office.
duction of Medicare premiums) you (and your spouse if
filing jointly) received for 2018 that aren't taxable. Also,
enter any tier 1 railroad retirement benefits treated as so-
Part III. Figure Your Credit
cial security that aren't taxable.
If any of your social security or equivalent railroad re-
Line 11
tirement benefits are taxable, the amount to enter on this
line is generally the difference between the amounts en-
If you checked box 2, 4, 5, 6, or 9 in Part I, use the fol-
tered on Form 1040, line 5a and line 5b.
lowing chart to complete line 11.
If your social security or equivalent railroad re­
IF you checked . . .
THEN enter on line 11 . . .
!
tirement benefits are reduced because of workers'
compensation benefits, treat the workers' com­
Box 6
The total of $5,000 plus the disability
CAUTION
pensation benefits as social security benefits when com­
income you reported on Form 1040 for
pleting Schedule R (Form 1040), line 13a.
the spouse who was under age 65.
Box 2, 4, or 9
The total amount of disability income
Line 13b. Enter the total of the following types of in-
you reported on Form 1040.
come that you (and your spouse if filing jointly) received
Box 5
The total amount of disability income
for 2018.
you reported on Form 1040 for both
Veterans' pensions (but not military disability pen-
you and your spouse.
sions).
Any other pension, annuity, or disability benefit that
is excluded from income under any provision of federal
law other than the Internal Revenue Code. Don't include
Example 1. Bill, age 63, retired on permanent and total
amounts that are treated as a return of your cost of a pen-
disability in 2018. He received $4,000 of taxable disabili-
sion or annuity.
ty income that he reports on Form 1040, line 1. He is fil-
Don't include on line 13b any pension, annuity, or sim-
ing jointly with his wife who was age 67 in 2018, and he
ilar allowance for personal injuries or sickness resulting
checked box 6 in Part I. On line 11, Bill enters $9,000
from active service in the armed forces of any country, or
($5,000 plus the $4,000 of disability income he reports
in the National Oceanic and Atmospheric Administration
on Form 1040, line 1).
or the Public Health Service. Also, don't include a disa-
Example 2. John checked box 2 in Part I and enters
bility annuity payable under section 808 of the Foreign
$5,000 on line 10. He received $3,000 of taxable disabili-
Service Act of 1980.
ty income, which he enters on line 11. John also enters
$3,000 on line 12 (the smaller of line 10 or line 11). The
largest amount he can use to figure the credit is $3,000.
R-3
Instructions for Physician's Statement
Taxpayer
Physician
If you retired after 1976, enter the date you retired in
A person is permanently and totally disabled if both
the space provided on the statement below.
of the following apply.
1. He or she can't engage in any substantial
gainful activity because of a physical or mental
condition.
2. A physician determines that the disability has
lasted or can be expected to last continuously for at
least a year or can lead to death.
Physician's Statement
Keep for Your Records
I certify that
Name of disabled person
was permanently and totally disabled on January 1, 1976, or January 1, 1977, or was permanently and totally
disabled on the date he or she retired. If retired after 1976, enter the date retired.
Physician: Sign your name on either line A or B below.
A The disability has lasted or can be expected to
last continuously for at least a year . . . . . . . . . . . . .
Physician's signature
Date
B There is no reasonable probability that the
disabled condition will ever improve . . . . . . . . . . .
Physician's signature
Date
Physician's name
Physician's address
R-4

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