Credit for the Elderly and the Permanently and Totally Disabled

§ 22. Credit for the elderly and the permanently and totally disabled(a) General ruleIn the case of a qualified individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 15 percent of such individual’s section 22 amount for such taxable year. (b) Qualified individualFor purposes of this section, the term “qualified individual” means any individual—(1) who has attained age 65 before the close of the taxable year, or (2) who retired on disability before the close of the taxable year and who, when he retired, was permanently and totally disabled. (c) Section 22 amountFor purposes of subsection (a)—(1) In generalAn individual’s section 22 amount for the taxable year shall be the applicable initial amount determined under paragraph (2), reduced as provided in paragraph (3) and in subsection (d). (2) Initial amount(A) In generalExcept as provided in subparagraph (B), the initial amount shall be—(i) $5,000 in the case of a single individual, or a joint return where only one spouse is a qualified individual, (ii) $7,500 in the case of a joint return where both spouses are qualified individuals, or (iii) $3,750 in the case of a married individual filing a separate return. (B) Limitation in case of individuals who have not attained age 65(i) In generalIn the case of a qualified individual who has not attained age 65 before the close of the taxable year, except as provided in clause (ii), the initial amount shall not exceed the disability income for the taxable year. (ii) Special rules in case of joint returnIn the case of a joint return where both spouses are qualified individuals and at least one spouse has not attained age 65 before the close of the taxable year—(I) if both spouses have not attained age 65 before the close of the taxable year, the initial amount shall not exceed the sum of such spouses’ disability income, or (II) if one spouse has attained age 65 before the close of the taxable year, the initial amount shall not exceed the sum of $5,000 plus the disability income for the taxable year of the spouse who has not attained age 65 before the close of the taxable year. (iii) Disability incomeFor purposes of this subparagraph, the term “disability income” means the aggregate amount includable in the gross income of the individual for the taxable year under section 72 or 105(a) to the extent such amount constitutes wages (or payments in lieu of wages) for the period during which the individual is absent from work on account of permanent and total disability. (3) Reduction(A) In generalThe reduction under this paragraph is an amount equal to the sum of the amounts received by the individual (or, in the case of a joint return, by either spouse) as a pension or annuity or as a disability benefit—(i) which is excluded from gross income and payable under—(I) title II of the Social Security Act, (II) the Railroad Retirement Act of 1974, or