Solved: My husband got money from his son because his son died. Why is Medicare treating this 1 time amount as income? Did TurboTax or I make a mistake in filling out the form?
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franmeehan
New Member

My husband got money from his son because his son died. Why is Medicare treating this 1 time amount as income? Did TurboTax or I make a mistake in filling out the form?

It was from his son's 401K and my husband was the recipient in line to collect it. Because of this Medicare increased my premium for 2018 (IRMAA) to half of my monthly SS benefit. 

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Accepted Solutions
SweetieJean
Level 15

My husband got money from his son because his son died. Why is Medicare treating this 1 time amount as income? Did TurboTax or I make a mistake in filling out the form?

Please see What if My Income Has Gone Down here:

https://www.ssa.gov/pubs/EN-05-10536.pdf

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6 Replies
VolvoGirl
Level 15

My husband got money from his son because his son died. Why is Medicare treating this 1 time amount as income? Did TurboTax or I make a mistake in filling out the form?

I think that's how it works.  The Medicare premium is based on your MAGI.  My friend cashed in some of her Savings Bonds and her Medicare increased from the $134 up to 186.

See, <a rel="nofollow" target="_blank" href="https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html">https://www.medicare.go...>
franmeehan
New Member

My husband got money from his son because his son died. Why is Medicare treating this 1 time amount as income? Did TurboTax or I make a mistake in filling out the form?

Thanks for the info. But this was not our 401K - it was my step son's. My husband was the beneficiary of the money.
xmasbaby0
Level 15

My husband got money from his son because his son died. Why is Medicare treating this 1 time amount as income? Did TurboTax or I make a mistake in filling out the form?

What did he do with the money?  Did he roll it over into a retirement account of his own?  Did he cash the whole thing out?
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
franmeehan
New Member

My husband got money from his son because his son died. Why is Medicare treating this 1 time amount as income? Did TurboTax or I make a mistake in filling out the form?

He could not roll it over. It was cashed out.
DoninGA
Level 15

My husband got money from his son because his son died. Why is Medicare treating this 1 time amount as income? Did TurboTax or I make a mistake in filling out the form?

The Medicare premium is based upon your federal Adjusted Gross Income plus your tax-exempt income.  Since there was the income from the 401(k) entered on your tax return the AGI increased.
See - <a rel="nofollow" target="_blank" href="https://www.ssa.gov/OP_Home/cfr20/418/418-1010.htm">https://www.ssa.gov/OP_Home/cfr20/418/418-1010.h...>
(6) Modified adjusted gross income is your adjusted gross income as defined by the Internal Revenue Code, plus the following forms of tax-exempt income:
(i) Tax-exempt interest income;
(ii) Income from United States savings bonds used to pay higher education tuition and fees;
(iii) Foreign earned income;
(iv) Income derived from sources within Guam, American Samoa, or the Northern Mariana Islands; and
(v) Income from sources within Puerto Rico.
SweetieJean
Level 15

My husband got money from his son because his son died. Why is Medicare treating this 1 time amount as income? Did TurboTax or I make a mistake in filling out the form?

Please see What if My Income Has Gone Down here:

https://www.ssa.gov/pubs/EN-05-10536.pdf

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