Social Security and Medicare Changes 2012 - John R. Dundon II, Enrolled Agent
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Social Security and Medicare Changes 2012

Social Security and Medicare Changes 2012

The Social Security Administration has announced the new benefits and thresholds for 2012 as follows:

  1. Gross Social Security benefits increase for 2012 by 3.6%. 

  2. The amount of earnings subject to Social Security taxes increases to $110,100. 

  3. The amount of earnings required to be subjected to Social Security taxes in order to receive a quarter of coverage increases to $1,130. 

  4. Earnings limitations for taxpayers who have not reached full retirement age (before having to repay Social Security benefits) increases to $14,640 ($1,220/month).

  5. Earnings limitations for taxpayers who reach full retirement age in the current year (before having to repay Social Security benefits)  increases to $38,880 ($3,240/month).  “Full retirement age” is age 66 for those born in 1943-1954.

  6. The maximum monthly Social Security benefits increases to $2,513. 

  7. The amount of the SSI Federal Payment Standard increase to $698/month.  For a married couple this increases to $1,048/month.  

  8. The SSI Student Exclusion Limits increases to $1,700/month with the annual limit increasing to $6,840.

  9. The Substantial Gainful Activity earnings increase to $1,010 per month for non-blind disabled recipients while the blind disabled recipients amount increases to $1,690/month.  

  10. The Trial Work Period earnings remain the same at $720/month.

The Department of Health & Human Services has announced the new Medicare amounts for 2012 as follows:

  1. The base Medicare Part B monthly premiums DECREASE from $115.40/month in 2011 to $99.90/month in 2012.  A “hold harmless” provision in the law has allowed about 73% of Social Security beneficiaries to avoid paying the Medicare insurance premiums over the past couple of years because the net Social Security check could not decrease as a result of higher Medicare premium.  These taxpayers typically have continued to pay $96.40/month in premiums.  Therefore as a result of the increase in Social Security gross benefits, these taxpayers will have an offsetting increase in Medicare insurance premiums of about $3.50/month, much less than anticipated.  Those taxpayers who have been paying higher Medicare premiums, such as those who signed up for Medicare in 2010 or 2011, should experience a decrease in their Medicare premiums.

  2. For 2012 the premiums vary depending on the taxpayers’ income as shown on their 2009 income tax returns and their filing status.  The monthly Medicare premium (base and extra) amounts for 2012 based on 2010 income and filing status are:

SINGLE:

Premiums – – – – Income of:

$99.90 – – – $85,000 or less

$139.90 – – – $85,001-$107,000

$199.80 – – – $107,001-$160,000

$259.70 – – – $160,001-$214,000

$319.70 – – – Above $214,000

Married Filing Joint:

Premiums – – – – Income of:

$99.90 – – – $170,000 or less

$139.90 – – – $170,001-$214,000

$199.80 – – – $214,001-$320,000

$259.70 – – – $320,001-$428,000

$319.70 – – – Above $428,000

Married Filing Single:

Premiums – – – – Income of:

$99.90 – – – $85,000 or less

$259.70 – – – $85,001-$129,000

$319.70 – – – Above $129,000

The Part B Medicare deductible for 2012 is $140.



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