Per IRS Publication 524 Credit for the Elderly or the Disabled, page 4:
Permanent and total disability. You have a permanent and total disability if you can't engage in any substantial gainful activity because of your physical or mental condition. A qualified physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. See Physician's statement, later.
Substantial gainful activity. Substantial gainful activity is the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. Full-time work (or part-time work done at your employer's convenience) in a competitive work situation for at least the minimum wage conclusively shows that you are able to engage in substantial gainful activity.
Substantial gainful activity isn't work you do to take care of yourself or your home. It isn't unpaid work on hobbies, institutional therapy or training, school attendance, clubs, social programs, and similar activities. However, the nature of the work you perform may show that you are able to engage in substantial gainful activity.
The fact that you haven't worked or have been unemployed for some time isn't, of itself, conclusive evidence that you can't engage in substantial gainful activity.
Sheltered employment. Certain work offered at qualified locations to physically or mentally impaired persons is considered sheltered employment. These qualified locations include work centers that are certified by the Department of Labor (formerly referred to as sheltered workshops), hospitals and similar institutions, homebound programs, and Department of Veterans Affairs (VA) sponsored homes.
Compared to commercial employment, pay is lower for sheltered employment. Therefore, one usually doesn't look for sheltered employment if he or she can get other employment. The fact that one has accepted sheltered employment isn't proof of the person's ability to engage in substantial gainful activity.
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 2023, you may not need to get another physician's statement for 2023. 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.
If you checked box 4, 5, or 6 in Part I of Schedule R, enter in the space above the box on line 2 in Part II the first name(s) of the spouse(s) for whom the box is checked.
Disability income. If you are under age 65, you also must have taxable disability income to qualify for the credit. Disability income must meet both of the following requirements.
Payments that aren't disability income. Any payment you receive from a plan that doesn't provide for disability retirement isn't disability income. Any lump-sum payment for accrued annual leave that you receive when you retire on disability is a salary payment and isn't disability income.
For purposes of the credit for the elderly or the disabled, disability income doesn't include amounts you receive after you reach mandatory retirement age. Mandatory retirement age is the age set by your employer at which you would have had to retire, had you not become disabled.
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