Today’s blog will focus on Medicare, Social Security, and electric vehicle (EV) tax credits for 2023.
The markets, however, are due for an over-sold bounce as evidenced by the market opening this morning. Inflation numbers reported last week remain running hot, keeping in mind, the true fall in housing is not yet reflected, and will be impactful.
Medicare Open Enrollment
We are now in the Medicare open enrollment period, which runs from October 15th through December 7th. If you are currently on Medicare, this is your annual opportunity to make certain you have the proper coverage at the most competitive costs for 2023.
We strongly recommend a review of your Medicare Part D prescription drug coverage, using either the Medicare Drug Plan finder or calling your Medicare provider. You should also do the same if you are on a Medicare Advantage Plan. If you would like to be referred to a local Medicare provider, please let us know.
Social Security COLA
Last week, we learned the Cost-of-Living Adjustment for 2023 will be 8.7%, the largest in many years. If you are collecting your Social Security Retirement Benefit, your January check will be increased by 8.7%.
If you’re age 62 or older and not yet collecting, the 8.7% increase will be added to your future benefit. For example, if you’re age 69 and delaying until age 70, your benefit will be increased by the combination of the 8%/year delayed credit, AND the 8.7% COLA, for a whopping 16.7% increase!
For those who are age 62 and not collecting, your benefit between ages 62 and 63 will increase by 5% of your Full Retirement Age benefit, automatically. The 8.7% COLA will be on top of the 5%, increasing your benefit from age 62 to age 63 by 13.7%.
Keep in mind for those not currently collecting, the COLA will not be reflected on your Social Security statement. It will be credited when you apply and begin collecting.
For questions on how COLA will impact your Social Security benefit, please feel free to reach out to our office.
EV Tax Credits for 2023
If you are considering purchasing an Electric Vehicle in 2023 and claiming the tax credit, here is a summary of the rules to assist with your decision:
- The Manufacturer’s suggested retail price cannot exceed 55K for sedans and 80K for vans, SUVs, and pickup trucks.
- If you file your taxes single or head of household, your Modified Adjusted Income cannot exceed $150K. Filing jointly the cap is $300K (No Comment).
- To be eligible for the full $7500 credit, EVs put in use after 2022 must meet a critical minerals requirement, and the “battery rule.” If only one is met, the credit is $3750. Under the critical mineral rule, the percentage of the battery’s minerals must be extracted or processed in the US, or in a country with the free-trade agreement with the US. The battery component rule requires a percentage of the battery’s components to be manufactured or assembled in North America.
- Beginning 2024, you will be able to monetize the tax credit, meaning you can use it at the dealership for your down payment.
- There are additional rules for used EVs, and I would anticipate alterations to most rules as we proceed.
If any of your friends or family might benefit from this information, please feel free to share!