Page 9 - Supplement to Income Tax TY2021

Recent Tax Developments*

the increase in their Part B premium to their Social 2021. If you have been notified by Social Security that
Security COLA, so their net monthly Social Security you must pay a surcharge, but your MAGI has been
benefit (after subtracting the premium) for 2021 stays reduced by a life-changing event, you may be able to
the same as it was in 2020. reduce or eliminate the surcharge. For example, if a
Medicare beneficiaries who directly pay their 2021 surcharge for 2021 was based on your 2019 MAGI
Part B premiums because they are not receiving Social but you experienced a life changing event that reduced
Security benefits, and those who enroll in Part B in your income in 2020 or your income will be reduced
2021, are not eligible for the hold-harmless limitation in 2021 because of the life-changing event, you can
and generally will pay the standard monthly premium ask Social Security to refigure your 2021 premium
of $148.50 in 2021. However, they, as well as other using your 2020 tax information or your estimated
beneficiaries with 2019 MAGI exceeding $88,000, or 2021 information (Social Security Form SSA-44 can
$176,000 if married filing jointly, must pay a monthly be used or you can call 1-800-772-1213).
surcharge in addition to the standard premium; see the The premium table on the following page assumes
next paragraph for surcharge details. that Social Security used 2019 filing status and MAGI

Part B surcharge for 2021 based on 2019 MAGI and to determine any surcharge for 2021. For 2021, there
filing status. Whether the premium surcharge are generally five surcharge tiers. However, there are only
applies depends on your adjusted gross income plus two surcharge tiers for married persons filing separately
tax-exempt interest (MAGI) for the year that is 2 years who lived with their spouse at any time in 2019.
prior to the year for which the surcharge is determined. Part D premium surcharge applies if Part B surcharge
That is why the potential Part B surcharge for 2021 applies. If you are subject to the Part B surcharge,
is based on your MAGI for 2019. Social Security you also must pay a surcharge in addition to your
obtains your filing data from the IRS to determine regular monthly premium for Part D prescription
any surcharge. If your 2019 tax return information drug coverage. For 2021, the Part D surcharge ranges
was not available, Social Security used your 2018 tax from $12.30 to $77.10 per month, as shown in the
return data to determine if you owe a surcharge for last column of the table on the following page.

Supplement to J.K. Lasser’s Your Income Tax 2021 | 7