What income is used to determine Medicare premiums 2024 2023?
Medicare premiums are calculated using your Modified Adjusted Gross Income (MAGI) from your tax return for two years prior to the current year.
So, the SSA looks at your 2022 tax returns to see if you must pay an IRMAA in 2024. For 2024, beneficiaries whose 2022 income exceeded $103,000 (individual return) or $206,000 (joint return) will pay a total premium amount ranging from $244.60 to $594.00 depending on income.
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.
What income is IRMAA based on? IRMAA is based on your Modified Adjusted Gross Income (MAGI) from two years ago. In other words, the 2024 IRMAA brackets are based on your MAGI from 2022. If the 2022 amount is not available, your 2021 MAGI is used to calculate IRMAA.
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.
Medicare Part D IRMAA in 2024. In 2024, beneficiaries whose 2022 income exceeded $103,000 (individual return) or $206,000 (joint return) will pay an added amount on top of plans' premiums ranging from $12.90 to $81 per month, depending on income.
The income used to determine your Medicare premium IRMAA is your adjusted gross income plus tax-exempt interest (such as municipal bond interest) from two years ago. Your 2024 income determines your IRMAA in 2026. Your 2023 income determines your IRMAA in 2025.
CMS, which calculates both Medicare Part B monthly premium amounts and IRMAA, uses what is known as Modified Adjusted Gross Income (MAGI). MAGI includes not only wages but also dividends, capital gains, tax-exempt interest income, and more.
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.
If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you'll pay the standard Part B premium and an income-related monthly adjustment amount.
Is Irmaa based on current year income?
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.
- 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 total of your AGI, plus non-taxable interest, is your MAGI for IRMAA purposes.
| Beneficiaries who file an individual tax return with income: | Beneficiaries who file a joint tax return with income: |
|---|---|
| Less than or equal to $103,000 | Less than or equal to $206,000 |
| Greater than $103,000 and less than or equal to $129,000 | Greater than $206,000 and less than or equal to $258,000 |
If you're on Medicare or Medicare Advantage and your income rises above a certain threshold, the Social Security Administration adds an extra charge to the standard Plan B or Plan D premiums based on IRMAA, or the Income-Related Monthly Adjustment Amount.
When you sell an asset, like a house, the profits are known as capital gains. Capital gains are a type of income, so they may affect how much you pay for Medicare coverage.
The 'Medicare tax', or IRMAA, takes into account your Modified Adjusted Gross Income (MAGI). It impacts Parts B and D of Medicare by progressively increasing the cost based on your income level. So if you're earning more than $103,000 individually or $206,000 as a couple in 2023 – brace yourself for higher costs.
IRMAA is based off of what is called your Modified Adjusted Gross Income, or MAGI. This can be confusing to calculate or find because it is not a specific line item on your tax return. To calculate MAGI for Medicare IRMAA, take you AGI and add tax-exempt interest.
Premiums and deductibles
For 2024, the Part A deductible will be $1,632 per stay, an increase of $32 from 2023. Beneficiaries with Medicare Advantage plans should check with their insurer for hospital charges. Part B: The standard monthly Part B premium is rising by almost $10 — from $164.90 to $174.70.
In situations where you have Social Security payments in conjunction with an income that meets the tax filing limitations, only the income will be counted toward your total when being considered for income-related medical benefits.
How is Irmaa calculated for 2025?
When it comes to IRMAA 2025 everything is about your income and the government defines your income as your adjustable gross income (AGI) plus any tax-exempt intertest you may have. To figure out your amount of IRMAA income simply look at lines 2a and 11 of your 2022 IRS form 1040.
| Part B Premium | 2025 Coverage (2023 Income) 0% Inflation |
|---|---|
| Standard | Single: <= $106,000 Married Filing Jointly: <= $212,000 Married Filing Separately <= $106,000 |
| 1.4x Standard | Single: <= $133,000 Married Filing Jointly: <= $266,000 |
| 2.0x Standard | Single: <= $166,000 Married Filing Jointly: <= $332,000 |
Some examples of income used from IRMAA are: Taxable Social Security benefits, Wages, Interest, Capital Gains, Pension and Rental Income, Dividends and any distribution from any tax-deferred investment like a Traditional 401(k), IRA or 403(b).
“Modified adjusted gross income includes certain non-taxable income, but does not include distributions from Roth IRAs,” he said. “That being the case, your Medicare premiums should not increase as a result of a Roth IRA distribution.” Email your questions to Ask@NJMoneyHelp.com.
Your MAGI, modified adjusted gross income, is just your AGI with certain deductions added back, such as student loan interest, foreign-earned income and housing exclusions, and employer adoption benefits, among other things. The numbers may be close, and they may even be the same in some cases.
