What this credit does

The Credit for the Elderly or Disabled is a federal tax credit that reduces the amount of income tax you owe if you are 65 or older, or if you are permanently and totally disabled. Unlike a deduction, which lowers your taxable income, a credit directly reduces your tax bill dollar-for-dollar. If you receive SSDI, you may be able to claim this credit on your tax return.

The credit is worth up to $1,125 if you file as a single filer, or up to $1,875 if you file as married filing jointly. The exact amount depends on your age, your filing status, and how much income you received during the year. The IRS calls this the Schedule R credit, after the form you use to calculate it.

This credit is separate from any other tax benefits you might receive. You do not have to choose between this credit and the standard deduction — you can claim both on the same return.

Key Takeaways

  • The Credit for the Elderly or Disabled reduces your federal income tax by up to $1,125 (single) or $1,875 (married filing jointly), depending on your income and age.
  • You must be 65 or older, or be permanently and totally disabled as defined by the IRS, to claim this credit.
  • The credit phases out as your income rises, so higher earners may receive a smaller credit or no credit at all.
  • You calculate the credit on IRS Schedule R and include it with your Form 1040 when you file your tax return.
  • SSDI benefits themselves are not taxable income for this credit, but other income you receive during the year counts toward the phase-out limit.

Who can claim this credit

To claim the Credit for the Elderly or Disabled, you must meet one of two conditions: you are 65 years old or older on December 31 of the tax year, or you are permanently and totally disabled.

If you are disabled, the IRS has a specific definition. You must have been unable to work because of a physical or mental condition that is expected to last at least 12 months or result in death. You also need proof of your disability status. If you receive SSDI or Supplemental Security Income (SSI), the Social Security Administration has already determined you are permanently and totally disabled, and you can use that information as your proof. If you do not receive SSDI or SSI, you will need a physician's statement confirming your disability.

Your filing status also matters. You can claim this credit if you file as single, married filing jointly, married filing separately, head of household, or may have access to widow(er). If you are married filing jointly, only one spouse needs to meet the age or disability requirement — the other does not.

How income limits affect the credit amount

The credit starts to shrink once your income reaches a certain threshold, and it disappears entirely at a higher threshold. These thresholds depend on your filing status and whether you are 65 or older or disabled.

For the 2023 tax year, if you are single and 65 or older, the credit begins to phase out at $17,500 of income. If you are single and disabled, it phases out at $17,500. If you are married filing jointly and at least one spouse is 65 or older, the phase-out begins at $26,000. These numbers change slightly each year because the IRS adjusts them for inflation.

The income that counts toward these limits includes wages, interest, dividends, capital gains, and net self-employment income. It also includes taxable Social Security benefits — but not your SSDI benefits themselves. SSDI is not counted as income for this credit, which is one reason this credit can be valuable for SSDI recipients.

The IRS provides worksheets and tables in the Schedule R instructions to help you calculate exactly how much credit you can claim based on your specific income and filing status.

How to claim the credit on your tax return

To claim this credit, you file IRS Schedule R along with your Form 1040 (your main federal income tax return). Schedule R walks you through a series of questions about your age, disability status, and income, then calculates your credit amount.

You will need to gather a few pieces of information before you start. Have your Social Security number, your filing status, your birth date, and a record of all income you received during the year. If you are claiming the credit based on disability rather than age, have your proof of disability ready — either a copy of your SSDI award letter or a physician's statement.

Once you complete Schedule R, you transfer the credit amount to line 20 of Form 1040. If you use tax software, the program will usually ask you questions about your age and disability status and calculate the credit automatically. If you file by paper, you must include Schedule R with your return.

SSDI and this credit: what you need to know

If you receive SSDI, this credit can work in your favor in two ways. First, SSDI benefits themselves do not count as income for the purpose of this credit. Second, if you are receiving SSDI, you have already been found permanently and totally disabled by Social Security, so you do not need a physician's statement — your SSDI award letter is sufficient proof.

However, if you have other income during the year — from a part-time job, interest on savings, a pension, or taxable Social Security benefits — that income counts toward the phase-out limits. This means earning additional income can reduce or eliminate your credit. It is worth calculating your credit both with and without additional income to see whether working or drawing from savings would change your tax situation.

SSDI recipients who are under 65 and disabled are often in a good position to claim this credit, because they may have lower overall income than working-age people and therefore may not hit the phase-out threshold.

When to file and where to get help

You claim this credit when you file your federal income tax return. The important date is usually April 15 of the year following the tax year you are reporting. If you cannot file by that date, you can request an extension, though the extension only delays filing — it does not extend the important date to pay any tax you owe.

If you need help calculating or claiming this credit, several resources are available. The IRS website has Schedule R instructions and worksheets. If you have a low income, you may be able to use the IRS Free File program, which offers free tax preparation software and sometimes free in-person help through Volunteer Income Tax information (VITA) sites. VITA is run by the IRS and staffed by trained volunteers who can help you claim credits you might otherwise miss.

A tax professional — a CPA, enrolled agent, or tax preparer — can also help you file and may support you claim every credit you are may have access to to. Some tax preparers offer free or low-cost services for people with disabilities or low incomes.

Frequently Asked Questions

Does SSDI count as income for this credit?

No. SSDI benefits are not counted as income when calculating this credit. However, other income you receive — wages, interest, pensions, or taxable Social Security retirement benefits — does count and can reduce the credit amount.

Can I claim this credit if I am under 65?

Yes, if you are permanently and totally disabled. You do not have to be 65 to claim it. You will need proof of your disability, which can be your SSDI award letter if you receive SSDI.

What is the difference between this credit and the standard deduction?

The standard deduction lowers your taxable income. A credit directly reduces your tax bill. You can claim both on the same return. The standard deduction for people 65 and older is higher than for younger filers, so you may benefit from both.

If I earn money from a part-time job, will it eliminate my credit?

It depends on how much you earn. The credit phases out as income rises, so some part-time earnings may reduce the credit but not eliminate it. You can calculate your credit with and without the additional income to see the impact before you decide whether to work.

Where do I get the form to claim this credit?

IRS Schedule R is available on the IRS website (irs.gov) and comes with instructions that walk you through the calculation. Tax software also includes this form, and tax preparers can file it for you.