The basic rules for the elderly tax credit

The Credit for the Elderly and Disabled is a federal tax credit available to people age 65 and older, or to people under 65 who are permanently and totally disabled. You must have lived in the United States for the entire tax year. The credit reduces the amount of federal income tax you owe, dollar for dollar.

Income limits are strict. For the 2023 tax year, your adjusted gross income must be below $17,500 if you are single, $26,250 if you are married filing jointly, or $13,125 if you are married filing separately. These limits change each year. Your nontaxable Social Security benefits and nontaxable pensions do not count toward these limits, which is why many people on fixed incomes remain under the threshold.

You cannot claim this credit if you are a dependent on someone else's tax return. You also cannot claim it if you received certain types of income during the year, such as a pension from a government employer that was based on disability.

Key Takeaways

  • You must be 65 or older on December 31 of the tax year, or permanently and totally disabled at any age, to be considered for this credit.
  • Income limits are $17,500 for single filers and $26,250 for married couples filing jointly in 2023, and nontaxable Social Security does not count toward this limit.
  • The credit amount ranges from $3.75 to $1,125 depending on your income and filing status, and it reduces your federal tax bill directly.
  • You claim this credit on Schedule R (Form 1040) when you file your federal tax return; you do not claim it separately or through a government office.

How much credit you receive

The credit amount depends on your income and filing status. The IRS publishes a table each year showing the exact credit for each income level. For 2023, the maximum credit is $1,125 for a single filer, $1,687.50 for married couples filing jointly, and $843.75 for married couples filing separately.

The credit decreases as your income rises. For every $2 of income above the threshold, the credit reduces by $1. This means that if your income is significantly above the limit for your filing status, you may receive little or no credit. The IRS worksheet in the instructions to Schedule R walks you through the calculation step by step.

What counts as income for this credit

Income for this credit includes wages, self-employment income, interest, dividends, capital gains, rental income, and taxable pensions. It also includes taxable portions of Social Security benefits. However, nontaxable Social Security benefits, nontaxable pensions from government employers, and certain other nontaxable income do not count.

This is why the credit can help people who receive Social Security. If you receive $20,000 in Social Security and $5,000 in taxable interest, only the $5,000 counts toward the income limit. Your adjusted gross income for the credit is much lower than your total income.

Permanent and total disability before age 65

If you are under 65, you can claim this credit if you are permanently and totally disabled. The IRS defines this as being unable to engage in any substantial gainful activity because of a physical or mental condition that is expected to last at least 12 months or result in death.

You must have a physician certify your disability on Form 1040 Schedule R, or you must have received disability benefits from Social Security or the Railroad Retirement Board before age 65. If you have a Social Security disability information letter, you can use that as proof instead of getting a new physician's statement.

How to claim the credit on your tax return

You claim this credit by filing Schedule R (Form 1040) with your federal tax return. Schedule R asks for your income, filing status, and age or disability status. You then use the worksheet in the Schedule R instructions to calculate your credit amount and enter it on your Form 1040.

If you file electronically, tax software will usually walk you through the questions and calculate the credit automatically if you meet the requirements. If you file by paper, you must complete the worksheet yourself. The IRS does not send you a separate notice or form to claim the credit — it is part of your regular tax filing.

You do not need to contact any government office or submit proof of age or disability when you file. However, keep documentation (birth certificate, physician's statement, or disability information letter) in case the IRS asks for it later.

When you cannot claim this credit

You cannot claim the credit if you are a dependent on someone else's return, even if you are 65 or older. You also cannot claim it if you received a nontaxable pension based on your status as a government employee who was disabled. Some people who receive certain types of military or government pensions are excluded.

If you are married and file separately, both spouses must meet the age or disability requirement to claim any credit. If only one spouse is 65 or older, the couple usually cannot claim the credit at all when filing separately.

State and local tax credits for seniors

Some states and cities offer their own tax credits for people 65 and older. These are separate from the federal credit and have different income limits and rules. For example, New York offers a credit for seniors with limited income, and some states offer property tax relief or rent credits. You would claim these on your state or local tax return, not on your federal return.

Contact your state tax authority or local assessor's office to learn whether your state or city has a senior tax credit. Many state tax agencies have online tools or phone lines that can tell you whether you meet the requirements.

Frequently Asked Questions

Does my Social Security count as income for this credit?

Only the taxable portion of your Social Security counts. If you receive $20,000 in Social Security and none of it is taxable, none of it counts toward the income limit. The IRS worksheet on Schedule R helps you determine how much of your Social Security is taxable.

Can I claim this credit if I am 64 but will turn 65 before the end of the year?

Yes. You must be 65 on December 31 of the tax year to claim the credit. If you turn 65 on any date during the year, including December 31, you meet the age requirement for that year.

What if I did not file a tax return because my income was too low?

You may still be able to claim the credit by filing a return. Even if you owe no income tax, filing allows you to claim the credit, which may result in a refund. Check the income limits for your filing status to see whether you should file.

Can my adult child claim me as a dependent if I claim this credit?

No. If you claim the Credit for the Elderly and Disabled, you cannot be claimed as a dependent on someone else's return. You and your child must decide who claims the credit based on your income and tax situation.

Where do I find the income limits and credit amounts for my tax year?

The IRS publishes updated limits and amounts each year in the Schedule R instructions, available on IRS.gov. You can also call the IRS at 1-800-829-1040 to ask about the current year's limits for your filing status.