Schedule R (Form 1040) figures the credit for the elderly or the disabled. You can take it if you were 65 or older at the end of 2025, or under 65 and retired on permanent and total disability with taxable disability income, and your income is under the limits. The credit is 15% of an initial amount of $5,000, $7,500 or $3,750, after cuts for nontaxable benefits and higher income.
Everything below comes from the IRS 2025 Instructions for Schedule R (Form 1040), as of October 2026. The IRS has discontinued Pub. 524; its content now sits in these instructions.
Who counts as a qualified individual
You must be a US citizen or resident alien, or elect to be treated as one, and either:
- you were 65 or older at the end of 2025, or
- you were under 65 at the end of 2025, retired on permanent and total disability, received taxable disability income for 2025, and on January 1, 2025, hadn't reached your employer's mandatory retirement age
A detail that trips people up: you're treated as 65 on the day before your 65th birthday, so someone born on January 1, 1961, counts as 65 at the end of 2025. You can take the credit on Form 1040 or 1040-SR, but not on Form 1040-NR.
Married people generally have to file jointly. Married filing separately only works if you lived apart from your spouse for all of 2025. There's a head of household route too: you can file as head of household and still qualify, even if your spouse lived with you during the first 6 months of the year, if you file a separate return, paid more than half the cost of keeping up your home, your spouse didn't live there at any time in the last 6 months, and the home was the main home of your child, stepchild or eligible foster child for more than half the year.
A nonresident alien generally can't take the credit. The exception is a nonresident married to a US citizen or resident who files a joint return and elects, with their spouse, to be treated as a US resident for the whole year.
The 2025 income limits
You generally can't take the credit if your adjusted gross income, or your nontaxable Social Security and other nontaxable pensions, annuities or disability income, reach these limits:
| Filing status | AGI of | Or nontaxable benefits of |
|---|---|---|
| Single, head of household or qualifying surviving spouse | $17,500 or more | $5,000 or more |
| Married filing jointly, one spouse qualifies | $20,000 or more | $5,000 or more |
| Married filing jointly, both spouses qualify | $25,000 or more | $7,500 or more |
| Married filing separately, lived apart all of 2025 | $12,500 or more | $3,750 or more |
That's the insight most people miss. The AGI column is often the easier test; the last column counts nontaxable Social Security, so a retiree with a modest income can still be ruled out by those benefits alone, before the 15% calculation even starts.
How the credit is worked out
- Start with the initial amount on line 10: $5,000 if you checked box 1, 2, 4 or 7; $7,500 for box 3, 5 or 6; $3,750 for box 8 or 9.
- If you're under 65, the amount is limited to your taxable disability income.
- Subtract your nontaxable Social Security, pensions, annuities and disability income.
- Subtract half of your AGI above a set level for your filing status, as in the instructions' examples.
- Multiply what's left by 15%. Your credit is the smaller of that and the credit limit worksheet amount.
The instructions' worked example shows how small the result can be: after the subtractions, a single filer had $50 left, and 15% of it gave a credit of $8.
Permanent and total disability
For the under-65 route, you're permanently and totally disabled if you can't engage in any substantial gainful activity because of a physical or mental condition, and a qualified physician decides the condition has lasted or can be expected to last at least a year, or can be expected to result in death. If you checked box 2, 4, 5, 6 or 9, you complete Part II, and in many cases you need a physician's statement, which you keep rather than file.
Disability income has to come from your employer's accident or health plan or pension plan and be taxed as wages. Payments after you reach mandatory retirement age don't count, and neither does a lump sum for accrued annual leave paid when you retire on disability.
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Substantial gainful activity means significant duties over a reasonable period, done for pay or profit or of a kind usually done for pay. Full-time work at minimum wage or more in a competitive job shows you can do it. Looking after yourself or your home, unpaid hobbies, therapy, school and social activities don't count, and sheltered employment at a qualified location isn't proof either.
Readers often ask about this next, and the walkthrough of the federal schedule for adjustments answers.
Letting the IRS figure it
You don't have to do the math. If you qualify and want the IRS to calculate the credit, check the box in Part I, fill in Part II and lines 11 and 13 of Part III if they apply, write 'CFE' next to line 6d on Schedule 3 (Form 1040), and attach Schedule R.
The verdict
Schedule R is worth a check for anyone 65 or over, or retired on disability, with a modest income and little or no nontaxable Social Security or pension. If either income test in the table puts you over, stop: you can't take it. If you missed it in an earlier year and qualified, an amended return on Form 1040-X is how to claim it.
Frequently asked questions
Who qualifies for Schedule R?
A US citizen or resident who was 65 or older at the end of 2025, or under 65 and retired on permanent and total disability with taxable disability income, and whose income is under the limits.
What is the income limit for the credit for the elderly or the disabled?
For a single filer, the credit generally isn't available with AGI of $17,500 or more or nontaxable benefits of $5,000 or more. The limits differ by filing status.
Does Social Security affect Schedule R?
Yes. Nontaxable Social Security counts as nontaxable income and reduces the amount the credit is figured on.
How much is the Schedule R credit?
It's 15% of the initial amount of $5,000, $7,500 or $3,750 after the reductions, limited by the credit limit worksheet.
Can the IRS figure the credit for me?
Yes. Check the box in Part I, complete the parts that apply, write CFE next to line 6d on Schedule 3 and attach Schedule R.
