U.S. Individual Income Tax Return

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Page 1 of 4 of 2008 Instructions for Schedule 3 (Form 1040A) 10:51 - 13-NOV-2008
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Department of the Treasury
Internal Revenue Service

2008 Instructions for Schedule 3 (Form 1040A)
Use Schedule 3 to figure the credit for the elderly or the disabled.
Credit for the
Additional information. See Pub. 524 for more details.
Elderly or the
Disabled for
Form 1040A
Filers
Who Can Take the Credit

Married Persons Filing Separate Returns

The credit is based on your filing status, age, and income. If
you are married filing a joint return, it is also based on your
spouse’s age and income. You may be able to take this credit
if either of the following applies.

If your filing status is married filing separately and you lived
with your spouse at any time during 2008, you cannot take
the credit.

1. You were age 65 or older at the end of 2008, or
2. You were under age 65 at the end of 2008 and you meet
all of the following.

See the chart below.

a. You were permanently and totally disabled on the date
you retired. If you retired before 1977, you must have been
permanently and totally disabled on January 1, 1976, or
January 1, 1977.
b. You received taxable disability income for 2008.
c. On January 1, 2008, you had not reached mandatory
retirement age (the age when your employer’s retirement
program would have required you to retire).

If you can take the credit and you want us to figure it for you,
check the box in Part I of Schedule 3 for your filing status and
age. Fill in Part II and lines 11 and 13 of Part III if they apply
to you. Then, enter “CFE,” on Form 1040A in the space to
the left of line 30 and attach Schedule 3 to your return.

Income Limits
Want the IRS To Figure Your Credit?

For the definition of permanent and total disability, see
What Is Permanent and Total Disability? on page 3-2. Also,
see the instructions for Part II on page 3-2.

Income Limits for the Credit for the Elderly or the Disabled
THEN you generally cannot take the credit if:
IF you are . . .

The amount on
Form 1040A, line 22, is . . .

Or you received . . .

Single, head of household, or qualifying
widow(er)

$17,500 or more

$5,000 or more of nontaxable social
security or other nontaxable pensions,
annuities, or disability income

Married filing jointly and only one
spouse is eligible for the credit

$20,000 or more

$5,000 or more of nontaxable social
security or other nontaxable pensions,
annuities, or disability income

Married filing jointly and both spouses
are eligible for the credit

$25,000 or more

$7,500 or more of nontaxable social
security or other nontaxable pensions,
annuities, or disability income

Married filing separately and you lived
apart from your spouse for all of 2008

$12,500 or more

$3,750 or more of nontaxable social
security or other nontaxable pensions,
annuities, or disability income

Sch. 3-1
Cat. No. 12059R

Page 2 of 4 of 2008 Instructions for Schedule 3 (Form 1040A)

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

What Is Permanent and Total Disability?
A person is permanently and totally disabled if both 1 and 2
below apply.
1. He or she cannot engage in any substantial gainful activity because of a physical or mental condition.
2. A physician determines that the condition has lasted or
can be expected to last continuously for at least a year or can
lead to death.
Examples 1 and 2 below show situations in which the individuals are considered engaged in a substantial gainful 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.
Example 1. Sue retired on disability as a sales clerk. She

now works as a full-time babysitter at the minimum wage.
Although she does different work, Sue babysits on ordinary
terms for the minimum wage. She cannot take the credit because she is engaged in a substantial gainful activity.
Example 2. Mary, the president of XYZ Corporation, retired

on disability because of her terminal illness. On her doctor’s
advice, she works part time as a manager and is 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 employer’s convenience. Mary
is considered engaged in a substantial gainful activity and
cannot take the credit.
Example 3. John, who retired on disability, took a job with a

former employer on a trial basis. The purpose of the job was
to see if John could do the work. The trial period lasted for
some time during which John was paid at a rate equal to the
minimum wage. But because of John’s disability, he was
given only light duties of a nonproductive, make-work nature. Unless the activity is both substantial and gainful, John
is not engaged in a substantial gainful activity. The activity
was gainful because John was paid at a rate at or above the
minimum wage. However, the activity was not substantial
because the duties were of a nonproductive, make-work nature. More facts are needed to determine if John is able to
engage in a substantial gainful activity.

Disability Income
Generally, disability income is the total amount you were
paid under your employer’s accident and health plan or pension plan that is included in your income as wages or payments instead of wages for the time you were absent from
work because of permanent and total disability. However,
any payment you received from a plan that does not provide
for disability retirement is not disability income.
In figuring the credit, disability income does not include
any amount you received from your employer’s pension plan
after you have reached mandatory retirement age.

Part II
Statement of Permanent and Total
Disability
If you checked box 2, 4, 5, 6, or 9 in Part I and you did not file
a physician’s statement for 1983 or an earlier year, or you
filed or got a statement for tax years after 1983 and your
physician signed on line A of the statement, you must have
your physician complete a statement certifying that:
• You were permanently and totally disabled on the date
you retired, or
• If you retired before 1977, you were permanently and
totally disabled on January 1, 1976, or January 1, 1977.
You do not have to file this statement with your Form
1040A. But you must keep it for your records. You can use
the physician’s statement on page 3-4 for this purpose. Your
physician should show on the statement if the disability has
lasted or can be expected to last continuously for at least a
year, or if there is no reasonable probability that the disabled
condition will ever improve. If you file a joint return and you
checked box 5 in Part I, you and your spouse must each get a
statement.
If you filed a physician’s statement for 1983 or an earlier
year, or you filed or got a statement for tax years after 1983
and your physician signed on line B of the statement, you do
not have to get another statement for 2008. But you must
check the box on line 2 in Part II to certify all three of the
following.
1. You filed or got a physician’s statement in an earlier
year.
2. You were permanently and totally disabled during
2008.
3. You were unable to engage in any substantial gainful
activity during 2008 because of your physical or mental condition.
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) of the
spouse(s) for whom the box is checked.
If the Department of Veterans Affairs (VA) certifies that
you are permanently and totally disabled, you can use VA
Form 21-0172 instead of the physician’s statement. VA Form
21-0172 must be signed by a person authorized by the VA to
do so. You can get this form from your local VA regional
office.

Sch. 3-2

Page 3 of 4 of 2008 Instructions for Schedule 3 (Form 1040A)

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your adjusted gross income is over a certain amount, depending on which box you checked in Part I.

Part III
Figure Your Credit
Line 11
If you checked box 2, 4, 5, 6, or 9 in Part I, use the following
chart to complete line 11.

If any of your social security or equivalent railroad retirement benefits are taxable, the amount to enter on this line is
generally the difference between the amounts entered on
Form 1040A, line 14a and line 14b.

IF you checked . . . THEN enter on line 11 . . .

Box 6

The total of $5,000 plus the disability
income you reported on Form 1040A
for the spouse who was under age 65.

Box 2, 4, or 9

The total amount of disability income
you reported on Form 1040A.

Box 5

The total amount of disability income
you reported on Form 1040A for both
you and your spouse.

Line 13a. Enter any social security benefits (before deduction of Medicare premiums) you (and your spouse if filing a
joint return) received for 2008 that are not taxable. Also,
enter any tier 1 railroad retirement benefits treated as social
security that are not taxable.

If your social security or equivalent railroad retirement benefits are reduced because of workers’
compensation benefits, treat the workers’ compensation benefits as social security benefits when
completing line 13a.
Line 13b. Enter the total of the following types of income

Example 1. Bill, age 63, retired on permanent and total disa-

bility in 2008. He received $4,000 of taxable disability income that he reports on Form 1040A, line 7. He is filing
jointly with his wife who was age 67 in 2008 and he checked
box 6 in Part I. On line 11, Bill enters $9,000 ($5,000 plus the
$4,000 of disability income he reports on Form 1040A,
line 7).
Example 2. John checked box 2 in Part I and enters $5,000
on line 10. He received $3,000 of taxable disability 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.

Lines 13a Through 18
The amount on which you figure your credit can be reduced
if you received certain types of nontaxable pensions, annuities, or disability income. The amount can also be reduced if

that you (and your spouse if filing a joint return) received for
2008.
• Veterans’ pensions (but not military disability pensions).
• Any other pension, annuity, or disability benefit that is
excluded from income under any provision of federal law
other than the Internal Revenue Code. Do not include
amounts that are treated as a return of your cost of a pension
or annuity.
Do not include on line 13b any pension, annuity, or similar
allowance for personal injuries or sickness resulting from active service in the armed forces of any country, or in the
National Oceanic and Atmospheric Administration or the
Public Health Service. Also, do not include a disability annuity payable under section 808 of the Foreign Service Act of
1980.

Sch. 3-3

Page 4 of 4 of 2008 Instructions for Schedule 3 (Form 1040A)

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Instructions for Physician’s Statement
Taxpayer
If you retired after 1976, enter the date you retired in the
space provided on the statement below.

Physician
A person is permanently and totally disabled if both of the
following apply.
1. He or she cannot 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. 䊳
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 . . . . . . . . . . . . . . . . .
B

Physician’s signature

Date

Physician’s signature

Date

There is no reasonable probability that the disabled
condition will ever improve . . . . . . . . . . . . . . . . . . . .

Physician’s name

Physician’s address

Sch. 3-4
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