medicare premium question.

[sailfish]

Does anyone know, if you get hit with a medicare surcharge for a higher income (like $230 per month) from your last year of working. Will this revert back to $115 a month the next year if your income is a lot lower and not earned income at all? Or is it a forever thing?
Someone I know started collecting SS in 2010, but retired in 2009 with a high income due to severence & vacation pay. SS based his higher Medicare premium on 2009's income, even though he was way under the amount for a surcharge and is just turning 65 in March of 2011. They ignored 2010's lower income !

 

[kaneohe]

I think there's a 2 yr delay between income and surcharge so if income spikes temporarily, the surcharge will also be temporary. Should be able to google and find the info.

 

[haha]

Someone I know started collecting SS in 2010, but retired in 2009 with a high income due to severence & vacation pay. SS based his higher Medicare premium on 2009's income, even though he was way under the amount for a surcharge and is just turning 65 in March of 2011. They ignored 2010's lower income !

The rules are very clear, but from what you write I am not sure what your friend experienced, or exactly what your question is.

If your friend starts Medicare in 2011, his premium will be based on his Medicare adjusted AGI, from page 1 of form 1040 for tax year 2009. If it is not, they have made an error.

Normally his 2010 income could not have anything to do with his 2011 Medicare premiums, because he hasn't even filed his returns.

There are a few well defined special circumstances and exceptions, which are clearly explained on the Medicare website, as well as other websites discussing this issue.

Ha

 

[FIRE'd@51]

Does anyone know, if you get hit with a medicare surcharge for a higher income (like $230 per month) from your last year of working. Will this revert back to $115 a month the next year if your income is a lot lower and not earned income at all? Or is it a forever thing?
Someone I know started collecting SS in 2010, but retired in 2009 with a high income due to severence & vacation pay. SS based his higher Medicare premium on 2009's income, even though he was way under the amount for a surcharge and is just turning 65 in March of 2011. They ignored 2010's lower income !

Yes, it drops back. His 2011 premium is based on his 2009 AGI, and his 2012 premium will be based on his 2010 AGI. He will not pay a surcharge in 2012 if his 2010 AGI is below the threshold of 85K for a single filer or 170K for married filing joinlty.

 

[sailfish]

Thanks to all who responded, it answered all my questions.
I couldn't find anything definitive when I googled.
Joe