Credit for the Elderly or the Disabled
You may be able to take this credit if by the end of 2008 (a) you were age 65 or older, or (b) you retired on permanent and total disability and you had taxable disability income, subject to certain conditions.
Permanent and Total Disability
A person is permanently and totally disabled if both 1 and 2 below apply.
- He or she cannot engage in any substantial gainful activity because of a physical or mental condition.
- A physician determines that the condition has lasted or can be expected to last continuously for at least a year or can lead to death.
Example 1. Sue retired on disability as a sales clerk. She now works as a full-time babysitter at the minimum wage. Although she does different work, Sue babysits on ordinary terms for the minimum wage. She cannot take the credit because she is engaged in a substantial gainful activity.
Example 2. Mary, the president of XYZ Corporation, retired on disability because of her terminal illness. On her doctor’s advice, she works part time as a manager and is paid more than the minimum wage. Her employer sets her days and hours. Although Mary’s illness is terminal and she works part time, the work is done at her employer’s convenience. Mary is considered engaged in a substantial gainful activity and cannot take the credit.
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