04 Oct Medicare premiums, Homestead Rebate, when you marry

Q. How do the Medicare premium surcharge and property tax rebates work when you get married? Because both programs have eligibility based on one or two years before the current year, would they exclude the income of the new spouse?
— Just married

A. Let’s take a look at each of your questions separately.

The Social Security Administration, which oversees Medicare, uses the most recent federal tax return that is provided by the IRS.

For the 2019 premium, this will be the 2017 return, which most taxpayers filed in early 2018, said Claudia Mott, certified financial planner with Epona Financial Solutions in Basking Ridge.

She said modified adjusted gross income, or MAGI, is used to determine whether an individual must pay additional premiums over and above the standard charges for Part B and Part D prescriptions.

“To calculate MAGI, tax-exempt interest and some deductions that may have been taken on the return need to be added back to your adjusted gross income amount,” she said. “Your status on that 2017 return will determine what surcharge you will pay in 2019.”

If you were single at that time, the surcharge begins when MAGI is greater than $85,000 and steps up at $107,000, $133,500 and $160,000, Mott said.
Once you have a tax return that shows a married joint filing status, the income limit increases to $170,000 – essentially the rate for singles filers multiplied by two.

“If your income as a single person was over the limit, but your joint income falls below the threshold, you will likely be free of the surcharge when your file is reviewed,” she said.

Social Security does provide you the opportunity to ask for a review of your surcharge if your income situation changes.

“For instance, if you are married and your joint income falls below the limit, but you did not as an individual, you may qualify to an adjustment,” Mott said.

You would use Form SSA-44 to request an income-related monthly adjustment.

Now on to the Homestead Rebate.

The state is currently accepting applications for 2017 through Dec. 2, 2019.

To be eligible, you must be a New Jersey resident who owned and occupied the home as a principal residence on Oct. 1, 2017, Mott said. In addition, the 2017 property taxes must have been paid and gross income must be below $75,000 for homeowners under age 65 or less than $150,000 if over 65, blind or disabled.

“If you were married or in a civil union on Oct. 1, 2017, you must provide your spouse/partner’s Social Security number unless you lived in separate residences,” she said. “The home does not need to be titled in both names in order to file the application, but one spouse must be the owner.”

For this benefit, the income you report must coincide with the filing status you choose on the application. For example, if you filed a joint return for 2017, the income must be for both of you, Mott said. If your date of marriage was after 2017, then this will not impact the current year’s application.

You can learn more here or by calling the Homestead Rebate hotline at (888) 238-1233.

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This story was originally published Oct. 4, 2019.

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