[Code of Federal Regulations]
[Title 26, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.37-2]

[Page 107-108]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.37-2  Credit for individuals age 65 or over.

    (a) In general. This section illustrates the computation of the 
credit for the elderly in the case of an individual who has attained the 
age of 65 before the close of the taxable year. This section shall not 
apply to an individual for any taxable year for which the individual 
makes the election described in section 37(e)(2) and paragraph (b) of 
Sec. 1.37-3.
    (b) Computation of credit. The credit for the elderly for an 
individual to whom this section applies equals 15 percent of the 
individual's ``section 37 amount'' for the taxable year. An individual's 
``section 37 amount'' for a taxable year is the initial amount 
determined under section 37(b)(2), reduced as provided in section 
37(b)(3) and (c)(1).
    (c) Examples. The computation of the credit for the elderly for 
individuals to whom this section applies may be illustrated by the 
following examples:


[[Page 108]]


    Example 1. A, a single individual who is 67 years old, has adjusted 
gross income of $8,000 for the calendar year 1977. A also receives 
social security payments of $1,450 during 1977. A does not itemize 
deductions. A's credit for the elderly is $120, computed as follows:

Initial amount under section 37(b)(2).........................    $2,500
Reductions required by section 37 (b)(3) and (c)(1):
    Social security payments........................    $1,450
    One-half the excess of adjusted gross income           250     1,700
     over $7,500....................................
                                                     ----------
Section 37 amount.............................................       800
                                                               =========
15 pct. of $800...............................................      $120



A's tax from the tax tables, which reflect the allowance of the general 
tax credit, is $662. Accordingly, the limitation of section 37(c)(2) and 
paragraph (b) of Sec. 1.37-1 does not reduce A's credit for the elderly.
    Example 2. H and W, who have both attained the age of 65, file a 
joint return for calendar year 1977. For that year H and W have adjusted 
gross income of $8,120; H also receives a railroad retirement pension of 
$1,550, and W receives social security payments of $1,200. H and W do 
not itemize deductions. The credit for the elderly allowed to H and W 
for 1977 is $139, computed as follows:

Initial amount under section 37(b)(2).........................    $3,750
Reductions required by section 37 (b)(3):
    Railroad retirement pension.....................    $1,550
    Social Security payments........................     1,200     2,750
                                                     ----------
Section 37 amount.............................................     1,000
                                                               =========
15 pct. of $1,000.............................................       150
Limitation based upon amount of tax (derived from table             $139
 reflecting allowance of general tax credit)..................



Since the adjusted gross income of H and W is not greater than $10,000, 
no reduction of the initial amount is required under section 37 (c)(1).

[T.D. 7743, 45 FR 84050, Dec. 22, 1980]