Tax Volunteers Ready To Help

Free Service Helps Take Worry Out Of Filing

On Feb. 1, MEAAA will begin scheduling appointments for free tax preparation at sites throughout St. Louis County. (AARP's Tax-Aide program will serve St. Charles County.) Trained volunteers will help you prepare your simple federal, state or Missouri Property Tax Returns. Call 636-207-0847 or 1-800-AGE-6060 for more information.

There are quite a few credits and deductions offered this tax year that should be exciting to seniors.

Making Work Pay Credit

Who can get it?

Those who have earned income, such as wages and income from self-employment. (Social Security and pensions are not earned income.)

How much is it?

The credit is 6.2 percent of earned income, up to $400 for an individual (up to $800 for married taxpayers filing a joint return).

Is it refundable?

Yes. You can get the credit even if you don’t owe taxes.

Is there an income limit?

Yes. The credit begins to phase out when your adjusted gross income is more than $75,000 ($150,000 for married couples filing jointly).

Government Retiree Credit

Who can get it?

Retirees receiving a federal, state or local government pension or annuity, but who are not covered by Social Security.

How much is it?

$250. However, if you are eligible for this credit, and you have earned income, your Making Work Pay credit combined with your Government Retiree Credit can’t exceed $400 (or $800 on a joint return).

Is it refundable?

Yes.

Is there an income limit?

No.

Anything else I should know?

If you receive Social Security, Railroad Retirement, SSI or VA benefits, you already got the economic recovery payment. If you already received a $250 economic recovery payment in 2009, you can’t claim the Government Retiree Credit.

Missouri Property Tax Credit — The "Circuit Breaker"

Who can get it?

Homeowners and some renters age 65 and older. You may also qualify if you are permanently disabled and age 18 or older. Also, you may qualify if you are age 60 and receiving surviving spouse Social Security benefits. You must have been a Missouri resident all year.

How much is it?

Up to $1,100 for homeowners and up to $750 for renters (including nursing home residents).

Is it refundable?

Yes.

Is there an income limit?

Your total household income — including Social Security and any other non-taxable income — must be below $30,000 if you are single (or below $34,000 if you are married, filing jointly). If you’re a renter, your total household income must be below $27,500 (or below $29,500 if you are married, filing jointly).

Anything else I should know?

You must pay your real estate taxes before you can claim this credit. If you are a renter, you may claim this credit unless your landlord is a non-profit organization, such as Cardinal Ritter Senior Services. In the past, the state of Missouri has given the credit to renters in housing owned by non-profits, but will stop doing so for the 2009 tax year and from now on.

The reason? Part of the rent you pay goes to paying your landlord’s real estate taxes, which is why you are eligible for the Property Tax Credit. If your landlord is a non-profit organization, it doesn’t pay real estate taxes.

Child and Dependent Care Credit

Who can get it?

Taxpayers who pay for care for a child under 13, or for a dependent or spouse who is physically or mentally incapable of self care, so that the taxpayer can work or look for work

How much is it?

The credit ranges from 20 to 35 percent of a taxpayer’s expenses.

Is it refundable?

No. You must have taxable income to claim the credit. A non-refundable credit reduces the taxes you owe, but you can’t get a refund of the excess credit if the credit reduces your taxes to zero.

Is there an income limit?

No, but your income determines what percentage of your expenses you can claim as a credit.

Anything else I should know?

If you pay your spouse or your dependent to provide this care, you can’t claim this credit.

Credit for the Elderly or Disabled

First of all, very few people qualify for this credit. If you get more than $5,000 in non-taxable Social Security or pension benefits ($7,500 if you’re married, filing jointly), you can’t get the credit.

Who can get it?

Those 65 or older, or under 65 and retired on permanent and total disability and getting taxable disability income.

How much is it?

The formula for figuring the credit is too complex to discuss here, but the amount is usually fairly small.

Is it refundable?

No.

Is there an income limit?

If your adjusted gross income is $17,500 or more or your non-taxable Social Security or pension are more than $5,000, you can’t get this credit. (The limit for a married couple filing jointly when both spouses qualify is adjusted gross income of $25,000 or more or non-taxable Social Security or pension of $7,500 or more).

Child Tax Credit

Who can get it?

Those claiming one or more children under age 17 as dependents. Seniors raising their grandchildren and claiming them as dependents might qualify.

How much is it?

Up to $1,000 for each child.

Is it refundable?

No, but if you don’t qualify for the full $1,000, you may qualify for the Additional Child Tax Credit, which is refundable. Ask your tax preparer for details.

Is there an income limit?

If you’re filing single or head of household, the credit phases out if your adjusted gross income is more than $75,000. If you’re married, filing jointly, the credit phases out above $110,000.

Earned Income Credit

Who can get it?

Those with earned income (such as wages or self-employment income — Social Security benefits are not earned income). You must be at least 25 but under 65 as of Dec. 31. If you have a qualifying child, you must be at least 18.

How much is it?

The formula is complex. If you have qualifying children, the amount could be significant. Your tax preparer can help.

Is it refundable?

Yes.

Is there an income limit?

Yes. It varies widely according to the number of qualifying children you have and your filing status.

Anything else I should know?

Seniors usually don’t qualify for the Earned Income Credit (EIC) unless they are still working and have a qualifying child or children. Disabled adults may be considered qualifying children for the purposes of EIC. Example: You are working and your permanently disabled adult sister is your dependent and lives with you. You might be eligible for EIC.

Other credits:

If you: installed new energy-efficient doors, windows, roof or insulation in 2009; bought a new car in 2009; or bought a home after Feb. 17, 2009, you might be eligible for certain other non-refundable credits. Ask your tax preparer.

MEAAA is a proud member of the Gateway EITC Community Coalition.

This article originally appeared in MEAAA's Aging Matters, February 2010.

Medicare Advantage Plan Enrollment Runs Through March 31

Q: Although I know that Medicare annual enrollment ended Dec. 31, can you tell me if there is another enrollment period going on now that ends on March 31?

A: The Medicare Advantage Open Enrollment Period runs from Jan. 1 through March 31 each year. The Medicare Advantage Open Enrollment Period provides Medicare beneficiaries with one opportunity to enroll in, disenroll from, or change a Medicare Advantage plan during the first three months of the year.

Unlike enrollment in Part B, (Original Medicare’s medical insurance coverage) the change in Medicare Advantage enrollment or disenrollment becomes effective the month after the change is made.

Medicare Advantage plans are health plan options like Health Maintenance organizations, (HMOs) and Preferred Provider Organizations, (PPOs), approved by Medicare and offered by private companies. These plans are part of Medicare and are sometimes called "Part C," or "MA plans."

Medicare pays a fixed amount for your care every month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare.

Medicare Advantage plans provide your Medicare health coverage, including your Part B medical benefits, and your Part A hospital benefits, and sometimes, Medicare prescription drug coverage, Part D. They are not supplemental insurance plans, and when you are enrolled in a Medicare Advantage plan you do not need to have supplemental insurance. Not all Medicare Advantage Plans work the same way, so you are encouraged to find out the plan’s rules before joining.

Only beneficiaries who are eligible to enroll in a Medicare Advantage plan may take advantage of the Open Enrollment Period. In other words, someone who wants to change plan coverage between January 1 and March 31, must have both Medicare Part A and Medicare Part B and must live in the area served by the Medicare Advantage plan.

Permissible changes during the current Open Enrollment Period include:

• Medicare Advantage with a Prescription Drug Plan to a different Medicare Advantage with a Prescription Drug Plan
• Medicare Advantage with a Prescription Drug Plan to Original Medicare and a stand-alone Prescription Drug Plan (PDP)
• Original Medicare and a stand-alone Prescription Drug Plan (PDP) to a Medicare Advantage with a Prescription Drug Plan
• Medicare Advantage-only plan to a different Medicare Advantage-only plan
• Medicare Advantage-only plan to Original Medicare
• Original Medicare to a Medicare Advantage-only plan

Beneficiaries may not add or drop the Medicare Prescription benefit, which is a Part D drug plan during the Open Enrollment Period that is running now through March 31. During this current Open Enrollment Period those who already have drug coverage, can only change to another plan option that offers drug coverage. If you do not have drug coverage, you may not change to another plan that offers drug coverage. The Part D, Prescription Drug benefit enrollment period, runs from November 15 through December 31.

For more information, please call 1-800-Medicare, or 1-800-633-4227, Medicare’s national toll-free helpline, available 24 hours a day, seven days a week.

This article originally appeared in MEAAA's Aging Matters, February 2010.

Putting a Stop to Billing Fraud

Most doctors, pharmacists, suppliers, insurance providers, and other health care providers who work with Medicare are honest. Unfortunately, there may be some who are dishonest. Medicare fraud happens when Medicare is billed for services or supplies that beneficiaries never receive. Medicare fraud costs taxpayers billions of dollars each year.

Tips for Consumers

Medicare is committed to helping protect beneficiaries from fraud and identity theft and offers the following suggestions:

• Protect your Medicare Number, which is located on your Medicare card. Treat your Medicare card like a credit card. Never give it out except to your doctor or other Medicare provider. Never give your Medicare or Medicaid number in exchange for free medical equipment or any other "free" offer. Dishonest providers could use your number to get payment for services they never delivered.
• If someone comes to your door claiming to be from Medicare or Medicaid, remember that Medicare and Medicaid do not send representatives to your home.
• Ask questions! You have a right to know everything about your medical care, including the costs billed to Medicare.
• Educate yourself about Medicare. Know your rights and know what a provider can and cannot bill to Medicare.
• Use a calendar to record all of your doctor’s appointments and what tests or X-rays you get. Then check your Medicare statements carefully to make sure you got each service listed and that all the details are correct.
• Be cautious of any provider or plan representative who says he has been approved by the Federal government.
• Be wary of providers who tell you that the item or service is not usually covered, but they "know how to bill Medicare" so that Medicare will pay.
• Make sure you understand how a plan works before you join.
• Always check your pills before you leave the pharmacy to be sure you got the full amount. If you do not get your full prescription, report the problem to the pharmacist.
• Review your Medicare payment notice for errors.

The payment notice shows what services or supplies were billed to Medicare, what Medicare paid, and what you owe. Make sure Medicare was not billed for health care services or medical supplies and equipment you did not receive. If you spend time in a hospital, make sure the admission date, discharge date, and diagnosis on your bill are correct.

• Report suspected instances of fraud by calling 1-800-633-4227 (1-800-MEDICARE) or the Missouri SMP at 1-888-515-6565. SMP’s volunteer retired professionals are trained to identify Medicare, Mo Health Net, supplemental insurance and health care fraud and abuse. Volunteers provide assistance and counseling free-of-charge.

More information is available at www.stopmedicarefraud.gov.

For more information about any of these topics, contact MEAAA at 636-207-0847 or 1-800-AGE-6060.

This article originally appeared in MEAAA's Aging Matters, February 2010.