Here's a question that a client asked me recently. Any input is appreciated! Thanks!
"I will be 70 next Fall and will claim Social Security benefits at that time. I am glad I deferred payments.
My question has to do with the Windfall Elimination Provision (WEP). I believe I understand, but the information I have been reading isn’t completely clear. Every employer I worked for my entire life withheld Medicare taxes. Simply, I paid into Medicare my entire life and I have the required earned credits to receive a benefit. I have been receiving a pension from three companies for the past four years and Medicare taxes are not withheld from the pensions. This is the basis for some confusion.
I understand my Social Security benefit will not be reduced due to WEP because I paid into Medicare my entire life. However, because my pensions do not take out for Medicare taxes, I am not certain. Can you help clarify this for me?
Of course, I file a federal return every year and pay tax or receive a refund. In Florida, I don’t file a state return."
"I will be 70 next Fall and will claim Social Security benefits at that time. I am glad I deferred payments.
My question has to do with the Windfall Elimination Provision (WEP). I believe I understand, but the information I have been reading isn’t completely clear. Every employer I worked for my entire life withheld Medicare taxes. Simply, I paid into Medicare my entire life and I have the required earned credits to receive a benefit. I have been receiving a pension from three companies for the past four years and Medicare taxes are not withheld from the pensions. This is the basis for some confusion.
I understand my Social Security benefit will not be reduced due to WEP because I paid into Medicare my entire life. However, because my pensions do not take out for Medicare taxes, I am not certain. Can you help clarify this for me?
Of course, I file a federal return every year and pay tax or receive a refund. In Florida, I don’t file a state return."
