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 If your filing status is married filing separately and you lived

you are married filing a joint return, it is also based on your with your spouse at any time during 2008, you cannot take

spouse’s age and income. You may be able to take this credit the credit.

if either of the following applies. Income Limits

1. You were age 65 or older at the end of 2008, or See the chart below.

2. You were under age 65 at the end of 2008 and you meet

all of the following. Want the IRS To Figure Your Credit?

If you can take the credit and you want us to figure it for you, a. You were permanently and totally disabled on the date check the box in Part I of Schedule 3 for your filing status and you retired. If you retired before 1977, you must have been age. Fill in Part II and lines 11 and 13 of Part III if they apply permanently and totally disabled on January 1, 1976, or to you. Then, enter “CFE,” on Form 1040A in the space to January 1, 1977. the left of line 30 and attach Schedule 3 to your return. 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).

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:

The amount on

IF you are . . . Form 1040A, line 22, is . . . Or you received . . .

Single, head of household, or qualifying $17,500 or more $5,000 or more of nontaxable social

widow(er) security or other nontaxable pensions,

annuities, or disability income

Married filing jointly and only one $20,000 or more $5,000 or more of nontaxable social

spouse is eligible for the credit security or other nontaxable pensions,

annuities, or disability income

Married filing jointly and both spouses $25,000 or more $7,500 or more of nontaxable social

are eligible for the credit security or other nontaxable pensions,

annuities, or disability income

Married filing separately and you lived $12,500 or more $3,750 or more of nontaxable social

apart from your spouse for all of 2008 security or other nontaxable pensions,

annuities, or disability income

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Cat. No. 12059R
What Is Permanent and Total Disability? For more details on disability income, see Pub. 525.

A person is permanently and totally disabled if both 1 and 2

below apply. Part II 1. He or she cannot engage in any substantial gainful ac- Statement of Permanent and Total tivity because of a physical or mental condition.

2. A physician determines that the condition has lasted or Disability

can be expected to last continuously for at least a year or can

lead to death. 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 Examples 1 and 2 below show situations in which the indi- filed or got a statement for tax years after 1983 and your viduals are considered engaged in a substantial gainful activ- physician signed on line A of the statement, you must have ity. Example 3 shows a person who might not be considered your physician complete a statement certifying that: engaged in a substantial gainful activity. In each example, the • You were permanently and totally disabled on the date person was under age 65 at the end of the year. you retired, or Example 1. Sue retired on disability as a sales clerk. She • If you retired before 1977, you were permanently and now works as a full-time babysitter at the minimum wage. totally disabled on January 1, 1976, or January 1, 1977. Although she does different work, Sue babysits on ordinary

terms for the minimum wage. She cannot take the credit be- You do not have to file this statement with your Form cause she is engaged in a substantial gainful activity. 1040A. But you must keep it for your records. You can use

Example 2. Mary, the president of XYZ Corporation, retired the physician’s statement on page 3-4 for this purpose. Your

on disability because of her terminal illness. On her doctor’s physician should show on the statement if the disability has

advice, she works part time as a manager and is paid more lasted or can be expected to last continuously for at least a

than the minimum wage. Her employer sets her days and year, or if there is no reasonable probability that the disabled

hours. Although Mary’s illness is terminal and she works part condition will ever improve. If you file a joint return and you

time, the work is done at her employer’s convenience. Mary checked box 5 in Part I, you and your spouse must each get a is considered engaged in a substantial gainful activity and statement.

cannot take the credit.

If you filed a physician’s statement for 1983 or an earlier Example 3. John, who retired on disability, took a job with a year, or you filed or got a statement for tax years after 1983 former employer on a trial basis. The purpose of the job was and your physician signed on line B of the statement, you do to see if John could do the work. The trial period lasted for not have to get another statement for 2008. But you must some time during which John was paid at a rate equal to the

minimum wage. But because of John’s disability, he was check the box on line 2 in Part II to certify all three of the

following. given only light duties of a nonproductive, make-work nature. Unless the activity is both substantial and gainful, John 1. You filed or got a physician’s statement in an earlier is not engaged in a substantial gainful activity. The activity year. was gainful because John was paid at a rate at or above the 2. You were permanently and totally disabled during minimum wage. However, the activity was not substantial 2008. because the duties were of a nonproductive, make-work na- 3. You were unable to engage in any substantial gainful ture. More facts are needed to determine if John is able to

engage in a substantial gainful activity. activity during 2008 because of your physical or mental condition.

Disability Income

Generally, disability income is the total amount you were If you checked box 4, 5, or 6 in Part I, enter in the space paid under your employer’s accident and health plan or pen- above the box on line 2 in Part II the first name(s) of the sion plan that is included in your income as wages or pay- spouse(s) for whom the box is checked. ments instead of wages for the time you were absent from

work because of permanent and total disability. However, If the Department of Veterans Affairs (VA) certifies that

any payment you received from a plan that does not provide you are permanently and totally disabled, you can use VA for disability retirement is not disability income. Form 21-0172 instead of the physician’s statement. VA Form

In figuring the credit, disability income does not include 21-0172 must be signed by a person authorized by the VA to

any amount you received from your employer’s pension plan do so. You can get this form from your local VA regional

after you have reached mandatory retirement age. office.

Sch. 3-2
your adjusted gross income is over a certain amount, depend- Part III ing on which box you checked in Part I. Figure Your Credit Line 13a. Enter any social security benefits (before deducLine 11 tion of Medicare premiums) you (and your spouse if filing a

joint return) received for 2008 that are not taxable. Also, If you checked box 2, 4, 5, 6, or 9 in Part I, use the following enter any tier 1 railroad retirement benefits treated as social chart to complete line 11. security that are not taxable.

IF you checked . . . THEN enter on line 11 . . . If any of your social security or equivalent railroad retirement benefits are taxable, the amount to enter on this line is Box 6 The total of $5,000 plus the disability generally the difference between the amounts entered on income you reported on Form 1040A Form 1040A, line 14a and line 14b. for the spouse who was under age 65.

If your social security or equivalent railroad retire- Box 2, 4, or 9 The total amount of disability income ment benefits are reduced because of workers’ you reported on Form 1040A. compensation benefits, treat the workers’ compenBox 5 The total amount of disability income sation benefits as social security benefits when

you reported on Form 1040A for both completing line 13a.

you and your spouse. Line 13b. Enter the total of the following types of income

that you (and your spouse if filing a joint return) received for

Example 1. Bill, age 63, retired on permanent and total disa- 2008.

bility in 2008. He received $4,000 of taxable disability in- • Veterans’ pensions (but not military disability pen- come that he reports on Form 1040A, line 7. He is filing sions). jointly with his wife who was age 67 in 2008 and he checked • Any other pension, annuity, or disability benefit that is box 6 in Part I. On line 11, Bill enters $9,000 ($5,000 plus the excluded from income under any provision of federal law $4,000 of disability income he reports on Form 1040A, other than the Internal Revenue Code. Do not include line 7). amounts that are treated as a return of your cost of a pension

Example 2. John checked box 2 in Part I and enters $5,000 or annuity.

on line 10. He received $3,000 of taxable disability income, Do not include on line 13b any pension, annuity, or similar which he enters on line 11. John also enters $3,000 on line 12 allowance for personal injuries or sickness resulting from ac- (the smaller of line 10 or line 11). The largest amount he can tive service in the armed forces of any country, or in the use to figure the credit is $3,000. National Oceanic and Atmospheric Administration or the

Public Health Service. Also, do not include a disability annu- Lines 13a Through 18 ity payable under section 808 of the Foreign Service Act of

The amount on which you figure your credit can be reduced 1980.

if you received certain types of nontaxable pensions, annuities, or disability income. The amount can also be reduced if

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Instructions for Physician’s Statement

Taxpayer Physician If you retired after 1976, enter the date you retired in the A person is permanently and totally disabled if both of the space provided on the statement below. 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. 

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

B There is no reasonable probability that the disabled

condition will ever improve ....................

Physician’s signature Date

Physician’s name Physician’s address

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