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Important 2022 Updates Regarding Estate Taxes, Medicare and Medicaid
Published January 18, 2022
With a new year upon us, we have new changes to the federal estate and gift tax limits, Medicare premiums, deductibles and co-insurance amounts for Medicare Part A and Part B programs, and the New York State Medicaid asset and income limits.
FEDERAL ESTATE AND GIFT TAX LIMITS
As of January 1, 2022, the federal annual gift tax exclusion rose to $16,000 per year per individual. This is an increase to the 2021 limit of $15,000 which was in place since 2018. This change means that you can now make gifts up to $16,000 annually to as many individuals as you would like each year without having to file a federal gift tax return.
For those who are applying for, or receiving, Nursing Home Medicaid, it must be noted that while the IRS has increased their gift amount limits, Medicaid will still treat uncompensated transfers as gifts which can incur a penalty period.
Also as of January 1, 2022, the federal estate tax exclusion amount for individuals who die in the 2022 calendar year increased to $12,060,000 for individuals and $24,120,000 for married couples. This increase in the estate tax exclusion means that an individual is allowed to make gifts totaling up to $12,060,000 during his/her lifetime without having to pay any federal estate or gift taxes.
It must be noted that while New York does not have a gift tax, it does have an estate tax limit which has increased to $6,110,000 (up from $5,930,000 in 2021). Estates that exceed $6,110,000 will incur estate taxes and must be planned for accordingly.
The Centers for Medicare & Medicaid Services (CMS) has released the 2022 premiums, deductibles and co-insurance amounts for Medicare Part A and Part B programs. See the tables below for the new 2022 amounts.
Medicare Part A (Hospital Services)
|Inpatient Hospital Deductible||$1,484||$1,556|
|Daily Co-Insurance||$0/day (days 1-60)|
$371/day (days 61-90)
$742/day (days 91-150) one time only lifetime reserve days
|$0/day (days 1-60)|
$389/day (days 61-90)
$778/day (days 91-150) one time only lifetime reserve days
|Skilled Nursing Facility (NSF) Daily Co-Insurance||$0/day (days 1-20)|
$185.50/day (days 21-100)
|$0/day (days 1-20)|
$194.50/day (days 21-100)
|Medicare Part A Premiums (For those who are not otherwise entitled to Part A benefits, but purchase Medicare coverage)|
$471/month (Individuals with less than 30 quarters of coverage)
$259/month (Individuals with 30-39 quarters of coverage
|$499/month (Individuals with less than 30 quarters of coverage)|
$274/month (Individuals with 30-39 quarters of coverage
Medicare Part B (Physician Services)
|Co-Insurance||20% of approved charge||20% of approved charge|
Medicare Part B Premiums
|Yearly Income||Yearly Income||2022 Premium|
(Amount You Pay Per Month)
|Single||Married||Married But File Separate Tax Returns|
|< $91,000||< $182,000||< $91,000||$170.10|
|$91,000 – $114,000||$182,001 – $228,000||N/A||$238.10|
|$114,001 – $142,000||$228,001 – $284,000||N/A||$340.20|
|$142,001 – $170,000||$284,001 – $340,000||N/A||$442.30|
|$170,001 – $499,999||$340,001 – $749,999||$91,000 – $408,999||$544.30|
For individuals applying for or receiving Medicaid benefits to cover their long-term care, often referred to as ‘blind, disabled, or over 65 years Medicaid,’ the amount of assets and income an individual is allowed to maintain has also increased in 2022.
For Community Based Medicaid, individuals are allowed to keep non-exempt resources of $16,800 (up from $15,900 in 2021); income of $934 plus a $20 unearned income credit (up from $884 plus a $20 unearned income credit in 2021). These values increase for married couples, but are subjective to whether one or both spouses are on Medicaid, and if so which type of Medicaid (community and/or nursing home) each spouse is receiving.
In addition to the increase in asset and income limits, the state has also increased the value of one’s equity they may have in their home and still qualify for Medicaid benefits. The home equity limit has increased to $955,000 (up from $906,000 in 2021). While such a large value asset may be considered exempt for Medicaid purposes, it may eventually be subject to Medicaid estate recovery upon your passing and/or subject to a lien put in place during your lifetime (liens are for nursing home Medicaid benefits only).
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