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The TaxAct® program will automatically determine if the credit from Schedule R Credit for the Elderly or the Disabled is applicable on the return based on the information entered (e.g. date of birth). If Schedule R is applicable to the return, the first screen in the Credits section of the Q&A will be titled Credit for the Elderly and the Disabled. This section of the Q&A can also be accessed directly by clicking Federal (on smaller devices, click in the upper left-hand corner, then select Federal), clicking Other Credits in the Federal Quick Q&A Topics menu to expand, then clicking Credit for the elderly or the disabled.

If you are expecting this credit to calculate on your return and the credit is not appearing on Schedule 3 (Form 1040) Additional Credits and Payments, Line 6, see the navigation steps below for items that may need to be verified.

Blind or Disabled (and Date of Death):

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Basic Information in the Federal Quick Q&A Topics menu to expand, then click Name.
  3. If applicable for the taxpayer, check Legally blind, permanently disabled, or passed away, check or select the applicable items, then click Continue.
  4. If a spouse is included in this return and this credit is applicable for the spouse, check Legally blind, permanently disabled, or passed away on the spouse's page, check or select the applicable items, then click Continue.

Form 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Type of Income (and the checkbox if you have not reached retirement age):

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Retirement Plan Income in the Federal Quick Q&A Topics menu to expand, then click IRA, 401(k) and pension plan distributions (Form 1099-R).
  3. Click + Add Form 1099-R to create a new copy of the form or click Edit to review a form already created.
  4. Click Quick Entry to scroll down to answer all applicable questions or click Step-by-Step Guidance to proceed with the program interview questions.
  5. On the screen titled Retirement Plan Income - Box 7, check 7. IRA/SEP/SIMPLE, select "3-Disability" from the 7. Distribution code drop-down, then click Continue.

Additional Information

Per IRS Instructions for Schedule R Credit for the Elderly or the Disabled, on page R-1:

Who Can Take The Credit

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 2020, or
  2. You were under age 65 at the end of 2020 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 2020.
    c. On January 1, 2020, you hadn't reached mandatory retirement age (the age when your employer's retirement program would have required you to retire).

On page R-2:

What Is Permanent and Total Disability?

A person is permanently and totally disabled if both 1 and 2 below apply.

  1. He or she 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.

Per IRS Publication 524 Credit for the Elderly or the Disabled, on page 4:

Physician’s statement. If you are under age 65, you must have your physician complete a statement certifying that you had a permanent and total disability on the date you retired. You can use the statement in the Instructions for Schedule R.

You don't have to file this statement with your return, but you must keep it for your records.

Veterans. If the Department of Veterans Affairs (VA) certifies that you have a permanent and total disability, you can substitute VA Form 21-0172, Certification of Permanent and Total Disability, for the physician's statement you are required to keep. 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.

Physician's statement obtained in earlier year. If you got a physician's statement in an earlier year and, due to your continued disabled condition, you were unable to engage in any substantial gainful activity during 2020, you may not need to get another physician's statement for 2020. For a detailed explanation of the conditions you must meet, see the instructions for Schedule R, Part II. If you meet the required conditions, check the box on your Schedule R, Part II, line 2.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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