Reconciling expenses is a challenge for many senior citizens. Some on original Medicare are getting a bit of help this week thanks to an unexpected $90 payment from Uncle Sam. (Photo by SHVETS production)
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The first $90 payments to nearly 21 million original Medicare enrollees hit bank accounts today. Many recipients are wondering if the premium rebate is taxable income. Probably not, but we are still waiting for the official word from the federal medical insurance program and the Internal Revenue Service.
I got my $90 Medicare payment today! Yes, I am that old. So is the hubby. Since we now are $180 richer, we’re exploring what features we want to add to the new car we’re going to buy.
OK. I know that was a social media rumor that Donald J. Trump suggested recipients use the money to buy a vehicle or groceries. But I’m a sucker for a cheap joke, especially at the expense of politicians.
And with 47, it’s always worth checking out reports of his often outrageous comments. You never know.
It’s also worth asking another, more realistic question. Will the $90 Medicare rebate be taxed?
Probably tax-free, but…: Although most of the payments started hitting bank accounts today, neither the U.S. Centers for Medicare & Medicaid Services (CMS) nor the Internal Revenue Service have issued any tax guidance.
But judging from prior payments — notably, the economic stimulus payments from the George W. Bush administration in 2008 and the COVID amounts issued by the Biden administration — the money likely is tax-free for most recipients.
Of course, that’s just my prediction, not official tax advice. I’m basing it on the CMS’ official name for the payment — Medicare Improvement Fund (MIF) Premium Rebate — and published IRS guidance on the tax treatment of premium rebates from insurance companies.
The IRS says that these premium rebates are a purchase price adjustment to what the covered individuals paid. That adjustment amount is not taxable if the recipient did not deduct the premiums.
This tax reduction move is important to individuals who did deduct their Medicare Part B premiums as an itemized medical expense. That’s a possibility, since more people are again itemizing now that the One Big Beautiful Bill Act (OBBBA) has temporarily expanded the state and local taxes (SALT) cap.
If you’re one of those itemizers, when you include your allowable Medicare coverage amounts on Schedule A, you might want to subtract the $90 (or, if married filing jointly like the hubby and me, $180) from the amount.
Of course, you can always talk with a tax professional for guidance. That’s a good idea even after CMS and the IRS eventually weigh in on taxability of the Medicare rebates.
Capitol Hill could intervene: Congress, when (if) it goes back to work post-midterms, also could get involved. The House and Senate could pass a law specifically exempting the Medicare rebate amounts from federal taxation.
It wouldn’t be an unusual move. Capitol Hill lawmakers love to give themselves self-promotion opportunities to tout how they helped constituents.
With that, we’ve circled back (rather than weaving) to this post’s opening, specifically a whole new slew of jokes — like this flippant (or not) “Are Bribes taxable?” comment on a Reddit board — aimed at politicians.
Quick aside: Bribes tax and/or financial incentives don’t necessarily work the way the patron hoped or planned.
Eligibility limitations: Bringing Congress into the mix also leads into another political proclivity, speaking in broad, general terms. This tendency leads lawmakers to often omit mention of those who won’t get a benefit.
When Trump talked (and still talks) about the Medicare payments, he naturally makes it seem like every U.S. senior citizen would get the $90.
The White House’s official announcement is a bit more circumspect. It notes that the one-time payments of $90 per person would go to more than 20 million people who pay Medicare Part B premiums. These are participants in what usually is referred to as original Medicare.
The CMS FAQ on the MIF rebates elaborates. It says the payments will go to the 20.8 million Americans enrolled in original Medicare Part B who are —
- Living in the United States, are
- not receiving premium assistance from Medicaid; or,
- not paying an Income-Related Monthly Adjustment Amount.
IRMAA and Advantage plan excluded: Point #3 applies to original Medicare enrollees whose income is high enough that they must pay additional monthly amounts, usually referred to by the acronym IRMAA, for their Part B medical and Part D prescription coverage.
For 2026, the IRMAA income thresholds prompting the sliding-scale surcharges started at more than $109,000 for single filers and more than $218,000 for jointly filing couples. The amounts are based on tax data from two years prior; the delay gives the IRS and SSA time to get complete data. They are adjusted annually for inflation.
CMS also notes that individuals enrolled in Medicare Advantage plans are not eligible for the $90 payment.
Check your bank account: Eligible Medicare beneficiaries don’t have to apply for this one-time payment. If you gave Uncle Sam your bank account information when you enrolled, the Social Security Administration will directly deposit your rebate “on or around” Oct. 8.
I got a text message from my bank in the wee hours of this morning that our MIF premium rebates had been directly deposited. If you don’t get such electronic notices from your financial institution, give it a call or check your account online to see if your payment is there.
The Social Security Administration will snail mail a paper check for $90 later this month to eligible original Medicare enrollees who don’t have a direct deposit account. The check will include the message that it is the “Medicare Improvement Fund Payment; $90 Payment to Offset October Premium.”
If you don’t get a payment and/or want to check your eligibility for the 90 bucks, you can call 800-MEDICARE (800-633-4227).
Putting the rebate to good use: I hope you get your payment, especially if you’re one of the millions of elderly who are struggling to make ends meet (rather than just dropping by auto dealerships).
And if you don’t really need the extra cash, consider using it to support some of your less financially secure fellow senior citizens.
Start in your own community. Local governments, religious groups, and branches of national nonprofits can help you help your older needy neighbors.
You also can check out Nonprofit News Feed, which tracks and summarizes reports on the not-for-profit sector. It created a list of the Top 11 Trusted Seniors & Elderly Care Nonprofits in the US 2026. Among the nationally recognized organizations that made the cut are AARP Foundation, Alzheimer’s Association, Meals on Wheels America, and the National Council on Aging.
Your financial donation of $90 (or more) also could provide you a tax break on your 2026 return next year. Another OBBBA change was the reinstatement of the charitable gift tax deduction for taxpayers who claim the standard deduction.
