Jones: Determining if there are limitations on spouse’s earnings

Q: Mrs. M, of Chattanooga, writes: “I turned 62 in August of this year and have decided to start drawing my Social Security, which will start in February 2010. My question is: I will still work part time and I am aware of the $14,400 cap that I can earn but my husband (who is 62) is still working full time and plans to continue until 66, and of course will continue to draw his normal wages. Is there any limitation on his earnings and is there a combined amount that we are limited to earn?”

A: About one-third of people who receive Social Security have to pay income taxes on their benefits. If you file a joint tax return, you may have to pay taxes on 50 percent of your benefits if you and your spouse have a combined income that is between $32,000 and $44,000. If your combined income is more than $44,000, up to 85 percent of your Social Security benefit is subject to income tax. On the 1040 tax return, your combined income is the sum of your adjusted gross income plus nontaxable interest, plus one-half of your Social Security benefits.

Q: Mr. S, of Tunnel Hill, Ga., writes: “I am 64 years old (will be 65 in May 2010) and retired from the Federal Government nine years ago. Although I am retired under the Civil Service Retirement System (CSRS), participate in the Federal BlueCross Health Care Program, I am fully vested in the Medicare system.

My question is, before my 65th birthday how do I go about enrolling in the Medicare program? How will the premiums be paid? In light of having BlueCross Health Care should I participate in both Part A and Part B of the program? Any enlightenment or recommendations you could provide would be greatly appreciated?”

A: You should contact Social Security about three months before your 65th birthday to enroll in Medicare. You can make an appointment to have the application completed by phone or in person by calling 1-800-772-1213. You are entitled to Part A, the hospital part, without paying a premium. If you elect to enroll in Medicare Part B, the medical insurance, you will have to pay a monthly premium which can be deducted from your Civil Service pension. If you join a Medicare drug plan, you can keep your Federal Employee Health Benefit Program (FEHBP) plan, and your plan will let you know who pays first. For more information, contact the Office of Personnel Management at 1-888-767-6738, or visit www.opm.gov/insure.

Q: Mr. B, of Chattanooga, writes: “I know that the president wants to give us a one-time payment of $250 at the first part of the year (2010). Has the Congress voted yet, if so, what is their decision. Thank you for your column. I really do enjoy it and read it every week.”

A: I don’t have any information on the second stimulus payment to Social Security beneficiaries.

Q: Ms. E, of Ringgold, Ga., writes: “My brother recently started receiving his Social Security. He was advised that the first check would be held back. My question is why is this and what happens to that first check being withheld, should he pass away?”

A: We do not hold the first check as your brother indicated. He may have been told that Social Security benefits are paid in the month following the month for which they are due. To receive retirement benefits, you must be at least age 62 for the entire month. Let’s say your brother was born on Nov. 13, 1948.

He would not be entitled to benefits for the month of November because he is not 62 the entire month of November. The first month of eligibility would be December and that check would be paid in January 2010. People who were born on the first or second of the month however, will be paid the month they were born. In this example let’s say your brother was born on 11/01/48. He would be eligible for the month of November and that check would be paid in December 2009.

Get answers to your Social Security questions each Thursday from Social Security District Manager Eleanor Jones. Submit questions to her attention by writing to Business Editor John Vass Jr., Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by e-mailing him at jvass@timesfreepress.com.