U.S. Individual Income Tax Return

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Page 1 of 4 of 2008 Instructions for Schedule R (Form 1040)

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Department of the Treasury
Internal Revenue Service

2008 Instructions for Schedule R (Form 1040)
Credit for the
Elderly or the
Disabled

Use Schedule R (Form 1040) to figure the credit for the elderly or the disabled.
Additional information. See Pub. 524 for more details.

Married Persons Filing Separate
Returns

Who Can Take the Credit
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.

Nonresident Aliens

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.

If you were a nonresident alien at any time during 2008, you may be
able to take the credit only if your filing status is married filing
jointly.

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).

Income Limits
See the chart below.

Want the IRS To Figure Your Credit?

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

If you can take the credit and you want us to figure it for you, check
the box in Part I of Schedule R 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 the dotted line next to line 49 on Form 1040 and
attach Schedule R to your return.

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 1040,
line 38, 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

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Cat. No. 11357O

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

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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.

What Is Permanent and Total
Disability?
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.
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.

Part II. Statement of Permanent
and Total Disability

Examples 1 and 2 on this page 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.

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 1040. But
you must keep it for your records. You can use the physician’s
statement on page R-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.

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.

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.

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ity income. The amount can also be reduced if 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

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 you checked box 2, 4, 5, 6, or 9 in Part I, use the following chart
to complete line 11.
IF you checked . . .

THEN enter on line 11 . . .

Box 6

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

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 1040, line 20a and
line 20b.

Box 2, 4, or 9

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

Box 5

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

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 Schedule R,
line 13a.
Line 13b. Enter the total of the following types of income 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.

Example 1. Bill, age 63, retired on permanent and total disability in

2008. He received $4,000 of taxable disability income that he
reports on Form 1040, 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 1040, 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.

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.

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 disabil-

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Page 4 of 4 of 2008 Instructions for Schedule R (Form 1040)

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Instructions for Physician’s Statement
Taxpayer

Physician

If you retired after 1976, enter the date you retired in the space
provided on the statement below.

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 . . . . . . . . . . . . . . . . . .
Physician’s signature

Date

Physician’s signature

Date

B There is no reasonable probability that the disabled
condition will ever improve . . . . . . . . . . . . . . . . . . . .
Physician’s name

Physician’s address

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