Department of the Treasury

Internal Revenue Service

2003 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 your filing status is married filing separately and you

If you are married filing a joint return, it is also based on lived with your spouse at any time during 2003, you

your spouse’s age and income. You may be able to take cannot take the credit.

this credit if either of the following applies. Income Limits

• You were age 65 or older at the end of 2003 or

See the chart below.

• You were under age 65 at the end of 2003 and you

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

1. You were permanently and totally disabled on the If you can take the credit and you want us to figure it for

date you retired. If you retired before 1977, you must you, check the box in Part I of Schedule 3 for your filing

have been permanently and totally disabled on January 1, status and age. Fill in Part II and lines 11 and 13 of Part

1976, or January 1, 1977. III if they apply to you. Then, enter “CFE” next to line

30 on Form 1040A and attach Schedule 3 to your return. 2. You received taxable disability income for 2003.

3. On January 1, 2003, 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 2.

Also, see the instructions for Part II.

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

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

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

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

apart from your spouse for all of 2003 security or other nontaxable pensions

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Cat. No. 12059R
What Is Permanent and Total Disability? pension plan after you have reached mandatory retirement

age. 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. Part II 2. A physician determines that the condition has lasted

or can be expected to last continuously for at least a year Statement of Permanent and Total

or can lead to death. Disability

Examples 1 and 2 below show situations in which the If you checked box 2, 4, 5, 6, or 9 in Part I and you did individuals are considered engaged in a substantial gainful not file a physician’s statement for 1983 or an earlier activity. Example 3 shows a person who might not be year, or you filed or got a statement for tax years after considered engaged in a substantial gainful activity. In 1983 and your physician signed on line A of the each example, the person was under age 65 at the end of statement, you must have your physician complete a the year. statement certifying that:

Example 1. Sue retired on disability as a sales clerk. She • You were permanently and totally disabled on the now works as a full-time babysitter at the minimum date you retired or wage. Although she does different work, Sue babysits on • If you retired before 1977, you were permanently ordinary terms for the minimum wage. She cannot take and totally disabled on January 1, 1976, or January 1, the credit because she is engaged in a substantial gainful 1977. activity.

You do not have to file this statement with your Form Example 2. Mary, the president of XYZ Corporation, 1040A. But you must keep it for your records. You may retired on disability because of her terminal illness. On use the physician’s statement on page 4 for this purpose. her doctor’s advice, she works part time as a manager Your physician should show on the statement if the and is paid more than the minimum wage. Her employer disability has lasted or can be expected to last sets her days and hours. Although Mary’s illness is continuously for at least a year, or if there is no terminal and she works part time, the work is done at her reasonable probability that the disabled condition will employer’s convenience. Mary is considered engaged in a ever improve. If you file a joint return and you checked substantial gainful activity and cannot take the credit. box 5 in Part I, you and your spouse must each get a

Example 3. John, who retired on disability, took a job statement.

with a former employer on a trial basis. The purpose of If you filed a physician’s statement for 1983 or an the job was to see if John could do the work. The trial earlier year, or you filed or got a statement for tax years period lasted for some time during which John was paid after 1983 and your physician signed on line B of the at a rate equal to the minimum wage. But because of statement, you do not have to get another statement for John’s disability, he was given only light duties of a 2003. But you must check the box on line 2 in Part II to nonproductive, make-work nature. Unless the activity is certify all three of the following. both substantial and gainful, John is not engaged in a

substantial gainful activity. The activity was gainful 1. You filed or got a physician’s statement in an because John was paid at a rate at or above the minimum earlier year. wage. However, the activity was not substantial because 2. You were permanently and totally disabled during the duties were of a nonproductive, make-work nature. 2003. More facts are needed to determine if John is able to

3. You were unable to engage in any substantial engage in a substantial gainful activity. gainful activity during 2003 because of your physical or Disability Income mental condition.

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

from work because of permanent and total disability. If the Department of Veterans Affairs (VA) certifies However, any payment you received from a plan that that you are permanently and totally disabled, you can does not provide for disability retirement is not disability use VA Form 21-0172 instead of the physician’s income. statement. VA Form 21-0172 must be signed by a person

In figuring the credit, disability income does not authorized by the VA to do so. You can get this form

include any amount you received from your employer’s from your local VA regional office.

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Line 13a. Enter any social security benefits (before Part III deduction of Medicare premiums) you (and your spouse Figure Your Credit if filing a joint return) received for 2003 that are not

taxable. Also, enter any tier 1 railroad retirement benefits Line 11 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 any of your social security or equivalent railroad

retirement benefits are taxable, the amount to enter on

IF you checked . . . THEN enter on line 11 . . . this line is generally the difference between the amounts

entered on Form 1040A, line 14a and line 14b. Box 6 The total of $5,000 plus the disability

income you reported on Form 1040A

for the spouse who was under age 65. Note. If your social security or equivalent railroad

retirement benefits are reduced because of workers’ Box 2, 4, or 9 The total amount of disability income compensation benefits, treat the workers’ compensation you reported on Form 1040A. benefits as social security benefits when completing

Box 5 The total amount of disability income Schedule 3, line 13a.

you reported on Form 1040A for both

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) Example 1. Bill, age 63, retired on permanent and total received for 2003. disability in 2003. He received $4,000 of taxable

disability income that he reported on Form 1040A, line 7. • Veterans’ pensions (but not military disability

He filed a joint return with his wife who was age 67 in pensions).

2003. On line 11, Bill enters $9,000 ($5,000 plus the • Any other pension, annuity, or disability benefit that $4,000 of disability income he reported on Form 1040A). is excluded from income under any provision of Federal

law other than the Internal Revenue Code. Do not Example 2. John checked box 2 in Part I and enters

include amounts that are treated as a return of your cost $5,000 on line 10. He received $3,000 of taxable of a pension or annuity. 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 Do not include on line 13b any pension, annuity, or

$3,000. similar allowance for personal injuries or sickness

resulting from active service in the armed forces of any

Lines 13a Through 18 country, or in the National Oceanic and Atmospheric

Administration or the Public Health Service. Also, do not The amount on which you figure your credit may be include a disability annuity payable under section 808 of reduced if you received certain types of nontaxable the Foreign Service Act of 1980. pensions and annuities. The amount may also be reduced

if your adjusted gross income is over a certain amount,

depending on which box you checked in Part I.

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Instructions for Physician’s Statement

Taxpayer 1. He or she cannot engage in any substantial gainful

activity because of a physical or mental condition. If you retired after 1976, enter the date you retired in the 2. A physician determines that the disability has lasted space provided on the statement below. or can be expected to last continuously for at least a year

or can lead to death.

Physician

A person is permanently and totally disabled if both of the

following apply.

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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