Instructions Sch R (1040)

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Department of the Treasury
Internal Revenue Service

2023 Instructions for Schedule R

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October 6, 2023

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 2023,
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 2023.
2. You were under age 65 at the end of 2023 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 2023.
c. On January 1, 2023, 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, later.

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, enter “CFE”
on the dotted line next to Schedule 3 (Form 1040),
line 6d. Be sure to attach both Schedule 3 and Schedule R
to your return.

Disability Income

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

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.

Age 65
You are considered age 65 on the day before your 65th
birthday. As a result, if you were born on January 1,
1959, you are considered to be age 65 at the end of 2023.
Death of taxpayer. If you are preparing a return for
someone who died in 2023, consider the taxpayer to be
age 65 at the end of 2023 if they were age 65 or older on
the day before their death. For example, if the taxpayer
was born on February 14, 1958, and died on February 13,
2023, the taxpayer is considered age 65 at the time of
death. However, if the taxpayer died on February 12,
2023, 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 2023, you can't
take the credit.
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Income Limits for the Credit for the Elderly
or the Disabled

Example 2. Blake, the president of XYZ Corporation,
retired on disability because of a terminal illness. On the
doctor's advice, Blake works part-time as a manager and
is paid more than the minimum wage. The employer sets
the days and hours for Blake. Although Blake's illness is
terminal, and the work is performed part-time, the work
is done at the employer's convenience. Blake is considered engaged in a substantial gainful activity and can't
take the credit.
Example 3. Cameron, who retired on disability, took a
job with a former employer on a trial basis. The purpose
of the job was to see if Cameron could do the work. The
trial period lasted for some time during which Cameron
was paid at a rate equal to the minimum wage. But because of Cameron's disability, only light duties of a nonproductive, make-work nature was given. Unless the activity is both substantial and gainful, Cameron isn't
engaged in a substantial gainful activity. The activity was
gainful because Cameron 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
Cameron is able to engage in a substantial gainful activity.

THEN you generally can't take the credit
if:
The amount on
Form 1040 or
1040-SR, line 11,
is . . .

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October 6, 2023

IF you are . . .

Or you received . . .

single, head of
household, or
qualifying surviving
spouse

$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 2023

$12,500 or more

Part II. Statement of Permanent
and Total Disability

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

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.

What Is Permanent and Total
Disability?
A person is permanently and totally disabled if both 1
and 2 below apply.
1. They 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. Alex retired on disability as a sales clerk,
and now works as a full-time babysitter earning minimum wage. Although different work is performed, Alex
babysits on ordinary terms for the minimum wage. Alex
can’t take the credit because Alex 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 2023.
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.
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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, 2, and 6l . . . . . . . . . . . . . . . . . . . . . . . 2.

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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.

tered $3,000 on line 12 (the smaller of line 10 or line 11).
The largest amount that can be used to figure the credit is
$3,000.

2. You were permanently and totally disabled during
2023.
3. You were unable to engage in any substantial gainful activity during 2023 because of your physical or mental condition.

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 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 2023 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 table 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 2023.
• 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. You are 63 and retired on permanent and total disability in 2023. You received $4,000 of taxable disability income and will report the income on Form 1040,
line 1a. You are filing jointly with your spouse, who was
age 67 in 2023, and will check box 6 in Part I. On
line 11, you will enter $9,000 ($5,000 plus the $4,000 of
disability income you will report on Form 1040, line 1a).
Example 2. You checked box 2 in Part I and entered
$5,000 on line 10. You received $3,000 of taxable disability income, which is entered on line 11. You also enR-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. They 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.

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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 they 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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