On your federal return, a disability income exclusion is allowed as a refundable credit; however, DC treats it as a subtraction from income. If disability payments were included in your federal gross income, you may be able to claim an exclusion on your DC return.
To claim an exclusion, your physician must certify that you are permanently disabled according to the definition below. If both you and your spouse are claiming the exclusion, each must file a certification. You do not have to file another certification if you have filed one in a previous year.
You must meet all of the following requirements:
- You are not filing a Form D-40EZ
- If you are married, you are filing a joint return
- You received disability checks during 2005
- You were under the age of 65 on December 31, 2005
- You retired on disability and were permanently and totally disabled when you retired
- On January 1, 2005, you had not reached the age required to retire under your employers retirement program
- You have not notified the Office of Tax and Revenue that you have chosen to treat disability income as a pension
Total amount of disability payments received in 2005
Enter the total amount of disability payments you received in 2005. Do not include any lump-sum payment for accrued annual leave that you received when you retired on disability. (The annual leave payment should be included in your gross income for the tax year in which you received it). Payments you received from a retirement plan or profit-sharing plan that does not have a provision for disability retirement do not qualify for the exclusion.
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