Retirement Planning

A Tax Credit For The Elderly

Did you know that people over 65 - or under 65 on permanent full disability - may be eligible for a special tax credit? Be smart about how much your income can be taxed in retirement.

While Saving for Retirement, How Can I Take Advantage of the Credit for the Elderly?

Taxes are an integral part of retirement income planning. After all, you want to be smart about how much of your income may be taxed in retirement so that you can better plan for the years ahead as you start saving for retirement.

Credit for the Elderly or Disabled

Another good reason for incorporating a solid tax strategy in your retirement planning efforts would be to stay informed about the many different IRS tax laws and credits. This is important not only because tax laws and credits may change from year to year, but they can be different as you become older and once you enter into retirement. One of these is retirement credits is the Credit for the Elderly or Disabled.

The Credit for the Elderly is just that - a credit that may be applied to your income that may help reduce the amount of income tax you owe to the IRS. According to the IRS, you may be able to qualify for this credit if you are a U.S. citizen or resident alien and either of the following applies:

  • You were age 65 or older at the end of the previous year or
  • You are under age 65 and retired, and meet all of the following criteria:
    • You retired on permanent and total disability.
    • You received taxable disability income for the previous year.
    • On January 1, 2015, you had not reached mandatory retirement age.

Typically, if you're married at the end of the tax year, you and your spouse must file a joint return in order to take advantage of the credit. However, if you and your spouse did not live in the same household at any time during the tax year, you may be able to file either a joint return or separate returns and still remain eligible.

The Credit for the Elderly or Disabled is meant to help reduce the taxes for low-income retired and disabled retired individuals. For this reason, there are eligibility limits that are based on your adjusted gross income (AGI), or the total of your nontaxable Social Security and other nontaxable assets.

To learn more about the Credit for the Elderly or the Disabled, including circumstances that make you ineligible to claim, visit the IRS publication number 524.

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Retirement Planning

Getting smarter about your retirement planning includes understanding how taxes work in retirement. When you begin drawing income from your retirement accounts, its important to take advantage of any credits you may have available to you. A solid retirement plan that includes tax planning, can mean saving more of your hard earned dollars. For more information, visit the Protective learning center.


All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

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