34.8 Base Amount for the Elderly or Disabled Credit

The law specifies an initial base amount for figuring the credit. This base amount is reduced by certain tax-free benefits and excess adjusted gross income before applying the 15% credit amount and the tax liability limitation, if any (34.9).

The initial base amount is:

• $5,000, if you are single, head of household, or are a qualifying widow(er).
• $5,000, if you file a joint return and only one spouse is eligible for the credit.
• $7,500, if you file a joint return and both spouses are eligible for the credit. The credit is figured solely on this base; a separate computation is not made for each spouse.
• $3,750, if you are married and file a separate return. The credit may be claimed on a separate return only if you and your spouse have lived apart at all times during the year.

Base amount if disabled.

If you are under age 65 and permanently and totally disabled, the base amount for figuring the credit is the lower of your 2012 taxable disability income or the initial base amount for your filing status shown above. For example, if you are single, under age 65, permanently and totally disabled, and received taxable disability income of $4,800, you figure the credit on $4,800, which is less than the base of $5,000 for single persons.

Joint return and both spouses qualify for the credit.

If one spouse is age 65 or over and one spouse is under age 65 and receives disability income, the initial base amount is the lesser of (1) $7,500 or (2) $5,000 plus the disability income of the spouse under age 65. If both spouses are under age 65 and disabled, the initial base amount is the total of their disability income, not exceeding $7,500.

Caution

Low Social Security Benefits Required for Credit

The tax credit for the elderly or disabled is not available to an unmarried individual who receives $5,000 or more of nontaxable Social Security benefits or nontaxable federal pensions such as from the Veterans Administration. The $5,000 limit also applies if you are married filing jointly and only one spouse qualifies for the credit. The limit is $7,500 if you file a joint return and both spouses qualify for the credit.

- - - - - - - - - -