Key Takeaways
- Costco declared a one-time $30-a-share special dividend, payable Dec. 4, so it goes on shareholders’ 2026 tax returns.
- A single retiree with 500 shares in a taxable account and $110,000 of other income would report $125,000 for 2026, $16,000 past Medicare’s $109,000 single line for this year.
- Medicare sets 2028’s premiums from 2026 returns, and at this year’s rates, income in her band carries an $81.20 monthly Part B surcharge.
- The income lines rise with inflation every year, so 2028’s will be higher, but they’d have to climb nearly 15% for $125,000 to fall under the single line.
If you own Costco stock in a taxable account, an early holiday present is on the way. Costco declared a $30-a-share special dividend on Nov. 10, about $13.3 billion in all, payable Dec. 4 to shareholders of record on Nov. 24.
For a retiree on Medicare, though, a one-time check that big can mean a higher premium two years later. And since Costco pays it in December, it goes on this year’s tax return.
A $15,000 check on top of a full income
Let’s take a hypothetical single 70-year-old who holds 500 Costco shares in a regular brokerage account. On Dec. 4, she collects $15,000. Say the rest of her 2026 income, as Medicare counts it, comes to $110,000.
With the dividend, she’s at $125,000 for the year. That’s $16,000 above Medicare’s $109,000 line for single filers in 2026. On her other income alone, she’d be sitting right at that line.
Had she held the same shares in an IRA, the dividend would have stayed inside the account and off her return. But in a taxable account, every dollar of it counts.
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Medicare looks back two years
Medicare charges higher earners a surcharge on top of the standard Part B premium, and on Part D drug coverage too, set by the income on their tax return from two years before. The income it uses is modified adjusted gross income: adjusted gross income, dividends included, plus any tax-exempt interest. So her 2026 return, Costco check and all, sets what she pays for Medicare in 2028.
For 2026, a single filer with income above $109,000 and up to $137,000 pays an extra $81.20 a month for Part B. At $125,000, she’d land in that first band, $12,000 shy of the next one. That’s about $974 a year in extra Part B premiums, and a Part D plan carries a surcharge of its own on top.
2028’s lines will be higher
Those are this year’s figures, though, and her 2026 income will be measured against 2028’s. Each year, CMS raises the income lines by any increase in the Consumer Price Index, rounded to the nearest $1,000, so 2028’s single line will be higher than $109,000.
How much higher, nobody knows yet. But for $125,000 to fall under the line, it would have to rise nearly 15% in two years. Her $110,000 alone is only $1,000 over this year’s line, so even modest inflation could carry 2028’s line past it. Put differently, the Costco check could be the whole difference between paying the surcharge and not.
What she can still do before Dec. 31
She can’t turn the check down short of selling her shares before the Nov. 24 record date. And that would only swap the dividend for whatever gain she has in the shares, which counts in the same income.
Since she’s three years from her first required minimum distribution, any IRA withdrawal she hasn’t taken yet this year could wait until January, which moves it onto her 2027 return (and her 2029 premium). How much she’d need to move is anyone’s guess until 2028’s lines are out, and getting from $125,000 back under one could take a big cut.
She can’t ask Social Security for a new decision on Form SSA-44, either. That covers eight life-changing events, such as a spouse’s death, a divorce or stopping work, and a one-time dividend isn’t one of them.
Fortunately, the surcharge should be a one-year bill, since the dividend is a one-time payment. If the rest of her income holds steady, her 2027 return comes without the $15,000, and that’s the one that sets her 2029 premium.
What to check when CMS publishes
CMS sets each year’s lines in the fall (last year, it put out this year’s on Nov. 14), so 2027’s are due shortly and 2028’s a year from now. 2027’s will show how far one year of inflation moved the $109,000 line. When 2028’s come out, her number to check is the single line: if her 2026 income is above it, the surcharge shows up in her 2028 premium, at whatever amount CMS sets for that year.
Frankly, I wouldn’t lose sleep over it: a $15,000 check is well worth a one-year surcharge. But for anyone already near the line, it’s worth a look before taking any other income this December.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
