I retired in 2001 but managed with pension since I was not eligible for social security payment. Right now, I have 25 quarters. In 2004 and 2005 I did not pay medicare taxes and as a result did not receive any points. Can I now pat medicare taxes for those years to obtain additional points so I become closer to obtaining 40 quarters?

gumus01

AtlantaTaxExpert

Yes, you can, IF you had unreported self-employment income for those years.

If you amend your 2004 and 2005 tax returns and claim such income, be ready to PROVE that the income was earned, as the IRS is NOT stupid and will recognize that you are trying to qualify for Social Security and Medicare.

Further, the self-employment tax is 15.3% of your net self-employment income. You will file both Schedules C and SE, AND you will owe income taxes as well.

Expect to pay a 25% late-payment penalty, then compiunded interest accrued for 4-5 years on such amendments.

You should model the return to determine what your tax liability will be. You may find that it is best to let the sleeping dog lie!