Is Irmaa based on gross income or AGI?
SSA determines if you owe an IRMAA based on the income you reported on your IRS tax return two years prior, meaning two years before the year that you start paying IRMAA. The income that counts is the adjusted gross income you reported plus other forms of tax-exempt income.
The total of your AGI, plus non-taxable interest, is your MAGI for IRMAA purposes.
If you must pay higher premiums, we use a sliding scale to calculate the adjustments, based on your “modified adjusted gross income” (MAGI). Your MAGI is your total adjusted gross income and tax-exempt interest income.
MAGI is calculated as Adjusted Gross Income (line 11 of IRS Form 1040) plus tax-exempt interest income (line 2a of IRS Form 1040). The table below details the base premium amount you'll pay for Medicare in 2024 depending on your MAGI and filing status, inclusive of any additional IRMAA surcharge.
Medicare premiums are calculated using your Modified Adjusted Gross Income (MAGI) from your tax return for two years prior to the current year. For example, if you're paying premiums in 2024, these will be based on your 2022 MAGI.
How is my income used in my IRMAA determination? IRMAA is determined by income from your income tax returns two years prior. This means that for your 2024 Medicare premiums, your 2022 income tax return was used. IRMAA applicability and amounts are recalculated annually.
What is an IRMAA? People with Medicare who earn a high income have to pay an IRMAA, an extra charge on Medicare Parts B and D. The fee kicks in if you make more than $97,000 (going up to $103,000 in 2024) or if you and your spouse collectively earn over $194,000 (going up to $206,000 in 2024).
For 2024, if your income is greater than $103,000 and less than $397,000 the IRMAA amount is $384.30. If income is greater than or equal to $397,000 the IRMAA is $419.30. Medicare Part D. If your income is greater than $103,000 and less than $397,000, the IRMAA amount is $74.20.
- Make charitable contributions to lower your MAGI. ...
- Utilize Roth IRA funds instead of an IRA for some cash withdrawals.
- Spread out withdrawals for cash needs across a few years. ...
- If you have earned income, continue to make tax-deductible retirement contributions.
The Social Security Administration (SSA) determines who pays an IRMAA based on the income reported 2 years prior. So, for 2024, the SSA looks at your 2022 tax returns to see if you must pay an IRMAA. IRMAA is calculated every year.
What income level triggers higher Medicare premiums?
If you earn more than $103,000 ($206,000 if you're married), you pay higher monthly rates for both Medicare Part B and D. For 2024, your costs for Medicare Parts B and D are based on the income on your 2022 tax return.
The amount you pay depends on your modified adjusted gross income from your most recent federal tax return. To determine your 2024 income-related premium, Social Security will use information from your tax return filed in 2022 for tax year 2021.
MAGI is adjusted gross income (AGI) plus these, if any: untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest.
The calculation for IRMAA MAGI (Modified Adjusted Gross Income) includes just the taxable portion of Social Security.
| Single | Couple MAGI | Part B |
|---|---|---|
| < $103,000 | < $206,000 | $174.70 |
| $103,000 to $129,000 | $206,000 to $258,000 | $244.60 |
| $129,000 to $161,000 | $258,000 to $322,000 | $349.40 |
| $161,000 to $193,000 | $322,000 to $386,000 | $454.20 |
| Single | Couple MAGI | Part D |
|---|---|---|
| $131,000 to $163,000 | $262,000 to $326,000 | Premium + $35.30 |
| $163,000 to $196,000 | $326,000 to $392,000 | Premium + $57.00 |
| $196,000 to $500,000 | $392,000 to $750,000 | Premium + $78.60 |
| > $500,000 | > $750,000 | Premium + $85.80 |
Premium adjustments are two years behind.
Your 2023 income determines your IRMAA in 2025. Your 2022 income determines your IRMAA in 2024. Your 2021 income determines your IRMAA in 2023. Your 2020 income determines your IRMAA in 2022.
Does IRMAA Apply to Both Spouses? IRMAA applies to both spouses when both are on Medicare. Medicare premiums are charged to each individual beneficiary as there is no “family plan.”
Income and assets are not a factor in Medicare eligibility, so selling a home at a profit does not make you ineligible for Medicare. However, the gains from a home sale may increase your taxable income, meaning you need to pay IRMAA surcharges.
- the beneficiary's adjusted gross income (AGI) (found on line 11 of the Internal Revenue Service (IRS) tax filing form 1040), plus.
- tax-exempt interest income (line 2a of IRS Form 1040).
Does Irmaa affect Part D?
If you don't pay the Part D IRMAA, you'll lose your Part D coverage.
The Social Security Administration (SSA) uses your income tax information from 2 years ago to determine if you owe an IRMAA in addition to your monthly premium. The surcharge amount you'll pay depends on factors like your income bracket and how you've filed your taxes.
If you don't buy Part A when you're first eligible for Medicare (usually when you turn 65), you might pay a penalty. Most people pay the standard Part B monthly premium amount ($174.70 in 2024). Social Security will tell you the exact amount you'll pay for Part B in 2024.
Typically, the IRMAA income limit increases each year. In 2023, IRMAA applied to single filers whose MAGI exceeded $97,000 or $194,000 in 2021 for married couples filing jointly and in 2024, applied to single filers with a MAGI over $103,000 and married couples with a MAGI over $206,000 in 2022.
If you are still working and can make tax-deductible contributions to a Traditional IRA or Traditional 401(k), TSP, 403(b), or 457 plan, you can reduce your taxable income and reduce or avoid IRMAA. Consider Charity ...
