The Senior Tax Credit: Do I Qualify?

"The Senior Tax Credit," also called "The Credit for the Elderly or Disabled," is hard to qualify for and confusing. It is a federal tax credit applied to your income tax returns if you:

• Are 65 years old by the end of the tax year
• Have a disability (regardless of your age)
• Meet certain low-income requirements

This credit can result in a significant tax refund that lowers a qualifying older adult's tax bill. It is different than a tax deduction, which lowers your taxable income.

Eligibility Requirements for Tax Credit

To qualify for the Senior Tax Credit, you must be 65 years of age or older by the end of the tax year. If they are younger, you must:

• Be a retiree on permanent and total disability
• Have taxable disability income
• Not yet reached the mandatory retirement age

The IRS uses the Social Security Administration's (SSA) definition of disabled. The SSA defines disabled as the “inability to engage in any substantial gainful activity," which renders a person unable to work due to a mental or physical condition expected to last longer than 12 months. You must also be a U.S. citizen. Some exceptions apply to non-residents married to U.S. citizens or resident non-citizens. Lastly, you must meet certain income limits described in the table below.

Elderly and Disabled Tax Credit Income Limits (2022)

How Do I Claim the Credit for the Elderly or Disabled?

To claim the senior tax credit on your federal taxes, complete a Schedule R form with your IRS Form 1040A. The most recent Schedule R is on the Forms and Publications page of the IRS website.

Marriage During the Tax Year

If you're married by the end of the tax year, you are generally required to file a joint return as a married couple to claim the credit. But you can file separate returns if you did not live with your spouse at any time during the tax year. More information on preparing and filing a Schedule R is on the website.

Help With Tax Forms

For help in preparing Schedule R forms or your tax returns in general, the IRS provides a free tax return preparation program, Volunteer Income Tax Assistance (VITA). This program is available to qualifying taxpayers. It is particularly available to:

• People making $60,000 or less per year
• People with disabilities
• Limited English-speaking taxpayers

People over 60 who make $60,000 or less can also use the Tax Counseling for the Elderly (TCE) program.

Under the TCE and VITA programs, IRS-certified volunteers help with tax preparation and counseling. See the VITA locator on the IRS website to find a VITA volunteer near you.

State Tax Credits

Certain states also have their own form of older adult income tax credits or property tax exemptions that apply to your state or local tax returns.

California, for example, provides a Senior Head of Household Credit. Massachusetts, and other states, also offer Circuit Breaker Tax Credits to qualifying older adults based on real estate taxes, real property taxes, or rent paid during the year. To qualify for the credit as a homeowner, your Massachusetts property tax payments must exceed 10% of your total income for that tax year.

More information on senior tax credits or exemptions that may be available in your state is on the website of your state's treasury or revenue agency. You can also find more information from your local county tax assessor.

Further Considerations

The federal tax credit for the elderly or disabled only applies to the filer's tax return. It does not apply if the qualifying senior citizen was listed as a dependent on someone else's tax returns.

But in some cases, it may be advantageous for older people to be claimed as a dependent. Other tax benefits may apply to the filer. These benefits include deductions for medical expenses, Social Security earned income, home care, long-term care, nursing home, or caregiver costs.

For older people to be a dependent on another's tax returns:

1. The filer must provide over half of the older adult's financial support
2. The older adult must have lived with the filer for a full calendar year
3. Other factors like gross income and general IRS-dependent rules

The IRS defined gross income as “all income in the form of money, property, and services that isn't exempt from tax." Income from Social Security benefits is not considered taxable income. However, income from pension plans, retirement plans, and retirement accounts is taxable.

More Resources

For more information on tax relief for older adults, see FindLaw's Top Seven Senior Tax Breaks. Federal and state tax laws are complex and fluid. So it is important to consult a tax attorney, elder law attorney, or accountant to see what federal and state older adult tax deductions or credits are available to you. To contact a tax attorney for legal services, visit FindLaw's attorney directory.