Can SS withhold state income tax and late Medicare enrollment penalties with employer coverage?
Hitting retirement age and trying to plan finances carefully. Got two questions I can't seem to find clear answers to on the SSA website: 1) I know Social Security can withhold federal taxes at different percentage levels (7%, 10%, etc.) but does anyone know if they'll withhold STATE income taxes too? My state hits retirement income pretty hard and I'd rather have it automatically withheld than deal with quarterly payments. 2) I'm 69 and stayed on my husband's employer health insurance instead of signing up for Medicare at 65 (his plan is definitely qualifying coverage). When I finally apply for SS benefits and Medicare in the next few months, is there special documentation I need to provide to avoid late enrollment penalties? Do I need a letter from his employer confirming continuous coverage? Really appreciate any insights from folks who've navigated this!
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Jacinda Yu
For your first question - no, Social Security will NOT withhold state income taxes. They only handle federal withholding. You'll need to set up estimated tax payments with your state revenue department. I had to do this when I retired last year and it was annoying but not too difficult. For Medicare, you'll need Form CMS-L564 "Request for Employment Information" completed by your husband's employer to prove you had qualifying coverage. This form verifies you had group health plan coverage through current employment. Get this documentation BEFORE you apply for Medicare! You have an 8-month Special Enrollment Period after the employer coverage ends without penalties.
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Brian Downey
•Thank you so much! That's really helpful. I'll contact my state revenue office about setting up those quarterly payments. And I'll definitely get that CMS-L564 form from my husband's HR department before applying. Really appreciate the specific form number - makes it so much easier to know what to ask for.
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Landon Flounder
my neighbor got hit with a huge penalty for not signing up for medicare part b when she turned 65. she thought she was fine cuz she was on her husbands plan too but turns out it wasnt considered qualifying coverage!! be super careful and get everything in writing!!!!
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Brian Downey
•Oh that's concerning! Do you know why her husband's plan wasn't considered qualifying? Was it because it was retiree coverage rather than from active employment? I'm going to double-check with the benefits coordinator tomorrow to make absolutely sure.
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Jacinda Yu
•This is a common misunderstanding. Coverage through ACTIVE employment (your husband still working) IS qualifying coverage. Retiree coverage or COBRA is NOT qualifying coverage. The key factor is whether the coverage is through current employment. If your husband is still working and you're on his employer plan, you should be fine with the right documentation.
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Callum Savage
For the state tax question, you have to handle that separately from Social Security. It's really annoying! Each state has their own system. I retired in 2023 and had to figure this out. For Medicare, I DID have to provide proof of my qualifying coverage when I enrolled after 65. The Social Security office was actually pretty helpful about this when I finally got through to someone. I submitted a letter from my former employer's HR department that stated the dates of my coverage and that it was creditable coverage under Medicare rules. The agent told me that was sufficient. Don't wait until the last minute though - it can take FOREVER to get through to SSA these days. I spent weeks trying to reach someone on the phone about my Medicare enrollment. The hold times are ridiculous.
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Ally Tailer
•I had the same frustrating experience trying to reach SSA! After getting disconnected multiple times and waiting on hold for hours, I tried using Claimyr (claimyr.com) to get through to a Social Security agent. It actually worked - they called me back when they reached an agent instead of me sitting on hold. You can see how it works in this video: https://youtu.be/Z-BRbJw3puU Really helped when I needed to sort out my Medicare enrollment documentation issues.
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Brian Downey
•That's a great tip! I'll look into that service if I have trouble getting through. And yes, I'm definitely planning to start this process well before I actually need the benefits. Hearing about everyone's hold time nightmares is making me nervous!
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Aliyah Debovski
Regarding the Medicare question - you'll need what's called the "Part B Special Enrollment Period" since you delayed enrollment due to current employer coverage. The process SHOULD be smooth if you have the right documentation, but nothing with SS is ever actually smooth lol. Make sure you specifically mention "Special Enrollment Period" when you apply. In my experience, some SS employees aren't well-trained on all the exceptions.
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Miranda Singer
•This is correct. The Special Enrollment Period (SEP) exists specifically for people in your situation. However, there's an important detail: when you apply, you must complete both Form CMS-40B (Application for Enrollment in Medicare Part B) AND Form CMS-L564 (Request for Employment Information). The L564 must be signed by your husband's employer verifying your coverage dates. Also, the 8-month SEP begins either the month after employment ends OR the month after the group health plan coverage ends, whichever comes first. Don't miss this window or you'll face permanent penalties of 10% for each 12-month period you could have had Part B but didn't. Source: I'm a benefits counselor who helps people navigate these transitions.
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Cass Green
Both of your questions are really common! For state taxes, each state handles retirement income differently. While Social Security only handles federal withholding, many retirees set up quarterly estimated payments with their state. Some states don't tax Social Security benefits at all though - which state are you in? That makes a big difference. On Medicare - yes, you'll need documentation, but you should be fine. This situation (staying on a spouse's active employer plan) is specifically protected under Medicare rules. You qualify for a Special Enrollment Period. Just make sure you apply within 8 months of when that coverage ends. Honestly, I'd recommend making an appointment at your local Social Security office for these questions. These issues are complex enough that speaking with someone directly is your best bet.
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Brian Downey
•I'm in Vermont, which does tax a portion of SS benefits based on income. Thanks for suggesting the in-person appointment - that's probably the safest approach. I'll call to schedule something, and will look into that Claimyr service if I can't get through easily. Better to get this all squared away properly than risk penalties or tax headaches later!
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Landon Flounder
does anybody else think its RIDICULOUS that ss wont withhold state taxes?? they already have all our information and do federal withholding. just one more thing to complicate retirement!!
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Callum Savage
•YES! I've been saying this for years. Each agency making us jump through separate hoops. And then they wonder why retirees get frustrated with government systems. It's especially hard on people who aren't tech-savvy or have cognitive issues. My neighbor who's 82 gets so confused trying to manage all these different payment systems.
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Cass Green
•It's actually because state tax systems vary dramatically, and each state has different rules for taxing retirement benefits. Some states don't tax Social Security at all, others exempt certain amounts, and the rates differ widely. It would be extremely complex for SSA to maintain 50+ different state tax withholding systems. While frustrating, it makes sense why they don't handle it.
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