Disability retirement; deduction; amount
Sec. 9. (a) An individual who:
(1) retired on disability before the end of the taxable year; and
(2) was permanently and totally disabled, as determined under
subsection (c), at the time of retirement;
is entitled to a deduction from the individual's adjusted gross income
for that taxable year in the amount determined under subsection (b).
(b) The deduction provided by subsection (a) is the amount
determined using the following STEPS:
STEP ONE: Determine the amount received by the individual
during the taxable year through an accident and health plan for
personal injuries or sickness to the extent that:
(A) these amounts are attributable to contributions by the
individual's employer that were not includable in the
individual's gross income or are paid by the employer; and
(B) these amounts constitute wages or payments in lieu of
wages for a period during which the employee is absent from
work because of permanent and total disability.
STEP TWO: Determine for each week of the taxable year the
amount by which each weekly payment referred to in STEP
ONE exceeds one hundred dollars ($100), then add these
amounts.
STEP THREE: Determine the amount by which the individual's
federal adjusted gross income for the taxable year, as defined by
Section 62 of the Internal Revenue Code, exceeds fifteen
thousand dollars ($15,000).
STEP FOUR: Subtract from the amount determined in STEP
ONE the amount determined in STEP TWO and the amount
determined in STEP THREE.
(c) For purposes of this section, an individual is permanently and
totally disabled if the individual is unable to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death
or that has lasted or can be expected to last for a continuous period
of not less than twelve (12) months. An individual may not be
considered to be permanently and totally disabled unless he furnishes
proof of the existence of the disability as the department of revenue
may require.
As added by P.L.76-1985, SEC.3. Amended by P.L.47-2001, SEC.1.
Last modified: May 28, 2006