1040 Sch R Instr

Department of the Treasury
Internal Revenue Service

2020 Instructions for Schedule R
Credit for the
Elderly or the
Disabled

Use Schedule R (Form 1040) to figure the credit for the elderly or the disabled.
Future developments. For the latest information about developments related
to Schedule R (Form 1040) and its instructions, such as legislation enacted after they were published, go to IRS.gov/ScheduleR.
Additional information. See Pub. 524 for more details.

Nonresident Aliens

Who Can Take the Credit

If you were a nonresident alien at any time during 2020,
you may be able to take the credit only if your filing status is married filing jointly.

The credit is based on your filing status, age, and income.
If you are married and 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.
1. You were age 65 or older at the end of 2020, or
2. You were under age 65 at the end of 2020 and you
meet all of the following.
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 2020.
c. On January 1, 2020, you hadn't reached mandatory
retirement age (the age when your employer's retirement
program would have required you to retire).

Income Limits
See Income Limits for the Credit for the Elderly or the
Disabled.

Want the IRS To Figure Your Credit?
If you can take the credit and you want us to figure it for
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
and 13 of Part III if they apply to you. Then, check box c
on Schedule 3 (Form 1040), line 6, and enter “CFE” on
the line next to that box. Attach Schedule R (Form 1040)
to your return.

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
doesn't provide for disability retirement isn't disability income.

For the definition of permanent and total disability, see
What Is Permanent and Total Disability. Also, see the instructions for Part II. Statement of Permanent and Total
Disability.

Age 65
You are considered age 65 on the day before your 65th
birthday. As a result, if you were born on January 1,
1956, you are considered to be age 65 at the end of 2020.
Death of taxpayer. If you are preparing a return for
someone who died in 2020, consider the taxpayer to be
age 65 at the end of 2020 if he or she was age 65 or older
on the day before his or her death. For example, if the
taxpayer was born on February 14, 1955, and died on
February 13, 2020, the taxpayer is considered age 65 at
the time of death. However, if the taxpayer died on February 12, 2020, the taxpayer isn’t considered age 65 at
the time of death.

In figuring the credit, disability income doesn't include
any amount you received from your employer's pension
plan after you have reached mandatory retirement age.
For more details on disability income, see Pub. 525.

Married Persons Filing Separate
Returns
If your filing status is married filing separately and you
lived with your spouse at any time during 2020, you can't
take the credit.
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Jul 13, 2020

Cat. No. 11357O

Income Limits for the Credit for the Elderly
or the Disabled

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 can't 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 isn't 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 wasn't 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.

THEN you generally can't take the credit
if:

IF you are . . .

The amount on
Form 1040 or
1040-SR, line 11
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 2020

$12,500 or more

Part II. Statement of Permanent
and Total Disability
If you checked box 2, 4, 5, 6, or 9 in Part I and you didn't
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.

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

What Is Permanent and Total
Disability?
A person is permanently and totally disabled if both 1
and 2 below apply.
1. He or she can't engage in any substantial gainful
activity because of a physical or mental condition.
2. A qualified physician determines that the condition
has lasted or can be expected to last continuously for at
least a year or can be expected to result in death.

You don't have to file this statement with your tax return. But you must keep it for your records. You can use
the physician's statement later in these instructions 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.

Examples 1 and 2 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 earning minimum
wage. Although she does different work, Sue babysits on
ordinary terms for the minimum wage. She can't take the
credit because she is engaged in a substantial gainful activity.

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 don't have to get another statement for 2020.
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
2020.
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Credit Limit Worksheet—Line 21

Keep for Your Records

Use this worksheet to figure your credit limit.

1. Enter the amount from Form 1040 or 1040-SR, line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter the amount from Schedule 3 (Form 1040), lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . 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

3. You were unable to engage in any substantial gainful activity during 2020 because of your physical or mental condition.

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 your adjusted gross income is over a certain amount, depending on which box you checked in
Part I.
Line 13a. Enter any social security benefits (before deduction of Medicare premiums) you (and your spouse if
filing jointly) received for 2020 that aren't taxable. Also,
enter any tier 1 railroad retirement benefits treated as social security that aren't taxable.
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 or 1040-SR, line 6a and line 6b.
If your social security or equivalent railroad re­
tirement benefits are reduced because of workers'
CAUTION compensation benefits, treat the workers' com­
pensation benefits as social security benefits when com­
pleting Schedule R (Form 1040), line 13a.

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.

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 you checked . . .

THEN enter on line 11 . . .

Box 6

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

Box 2, 4, or 9

The total amount of disability income
you reported on your tax return.

Box 5

The total amount of disability income
you reported on your tax return for
both you and your spouse.

Line 13b. Enter the total of the following types of income that you (and your spouse if filing jointly) received
for 2020.
• 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. Don't include
amounts that are treated as a return of your cost of a pension or annuity.
Don't 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, don't include a disability annuity payable under section 808 of the Foreign
Service Act of 1980.

Example 1. Bill, age 63, retired on permanent and total
disability in 2020. He received $4,000 of taxable disability income that he reports on Form 1040, line 1. He is filing jointly with his wife who was age 67 in 2020, 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 1).
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.
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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

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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