What is considered income for Irmaa?

Asked by: Mr. Tavares Corkery  |  Last update: December 18, 2025
Score: 4.6/5 (47 votes)

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.

What income is used to determine Medicare premiums 2024-2023?

We use the most recent federal tax return the IRS provides to us. If you must pay higher premiums, we use a sliding scale to calculate the adjustments. This is based on your "modified adjusted gross income" (MAGI). Your MAGI is your total adjusted gross income and tax-exempt interest income.

What tax year is 2025 Irmaa based on?

The Social Security Administration (SSA) determines who pays an IRMAA based on the income reported 2 years prior. So, for 2025, the SSA looks at your 2023 tax returns to see if you must pay an IRMAA.

Does pension count towards Irmaa?

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).

Do 401k distributions count as income for Irmaa?

Your modified adjusted gross income (MAGI) includes all taxable income including income from 401(k)s, IRAs, savings, the taxable portion of Social Security, and any income from working. It does not include withdrawals from Roth 401(k)s and/or Roth IRAs.

What Types of Income is IRMAA Based on? How to Avoid the Medicare Surcharge

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Does selling a house count as income for Irmaa?

If your capital gain from the sale of a home exceeds the exclusion amount ($250,000 for individuals, $500,000 for joint filers), it will be treated as taxable income. So, if you made a sizable profit downsizing, it could show up in your IRMAA calculation two years later.

How many years does Irmaa last?

How many years does IRMAA last? IRMAA surcharges are recalculated annually based on your income from two years prior. If your income decreases in subsequent years, your IRMAA surcharge may be reduced or eliminated. However, if your income remains high, you may continue paying IRMAA surcharges yearly.

How to avoid Irmaa surcharges?

How to Avoid IRMAA: 9 (Simple) Ways to Reduce Medicare Costs
  1. 1.) Charitable Giving.
  2. 2.) Tax Deductible Retirement Account Contributions.
  3. 3.) Tax-Free Retirement Income.
  4. 4.) Tax-Efficient Investments.
  5. 5.) Tax-Efficient Withdrawal Strategies.
  6. 6.) Medicare Savings Accounts (MSAs)
  7. 7.) Roth Conversions.
  8. 8.) Tax Gain Harvesting.

What income level triggers higher Medicare premiums?

If you earn more than $106,000 ($212,000 if you're married), you pay higher monthly rates for both Medicare Part B and D. Currently insured? It's free, simple and secure. For 2025, your costs for Medicare Parts B and D are based on the income on your 2023 tax return.

How do I get Irmaa reduced?

Fill out the Medicare Income-Related Monthly Adjustment Amount-Life-changing Event (SSA-44) (PDF) form. Fax or mail your completed form and evidence to a Social Security office.

Does everyone have to pay $170 a month for Medicare?

Most people pay no premiums for Part A. For Medicare Part B in 2025, most beneficiaries will pay $185 per month. Certain factors may require you to pay more or less than the standard Medicare Part B premium in 2025.

What income is included in Magi for Irmaa?

The total of your AGI, plus non-taxable interest, is your MAGI for IRMAA purposes.

How do you calculate income for Irmaa?

Not all types of income are taken into consideration, however Medicare defines income for IRMAA to be “your adjusted gross income plus any tax-exempt interest you may have” or everything on lines 2a and 11 or the IRS form 1040 in tax-year 2022.

What is the income limit for Irmaa in 2024?

For 2024, the IRMAA thresholds again increased significantly, to $103,000 for a single person and $206,000 for a married couple. For 2025, the IRMAA thresholds are increasing modestly, to $106,000 for a single person and $212,000 for a married couple.

Can I deduct Irmaa on my taxes?

Is IRMAA Tax Deductible? Yes, IRMAA surcharges are deductible as part of the medical expense deduction (as are other Medicare expenses).

Do 401k contributions reduce Irmaa?

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.

How do you appeal Irmaa successfully?

You will use Form SSA-44 (Medicare Income Related Monthly Adjustment Amount – Life Changing Event). Complete the required information on the form and submit to a local Social Security office. Go to our website at www.medicaremindset.com/irmaa for more detailed instructions, as well as to download the appeal form.

What percentage of retirees pay Irmaa?

Given that a beneficiary's Part B monthly premium is based on one's income, wealthier Americans also pay an Income-Related Monthly Adjustment Amount, or IRMAA, which impacts about 8% of those with Medicare Part B, CMS stated.

Do 401k withdrawals count as income for Medicare?

You may not be rich, but your 401(k) and regular IRA withdrawals become taxable income, and you may look rich to Medicare. If you take out too much tax-deferred money, it can cause your Medicare monthly premiums to go up. This is called IRMAA (income related monthly adjustment amount).

Does rental income count towards Irmaa?

IRMAA is based on your MAGI, which includes various income sources such as taxable Social Security benefits, retirement distributions, rental income, and more. If you receive an IRMAA surcharge, you can appeal using Form SSA-44 if you have a qualifying life-changing event.

At what income does Irmaa kick in?

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 $106,000 (up from $103,000 in 2024) or if you and your spouse collectively earn over $212,000 (up from $206,000 in 2024).

Do Social Security payments count toward Irmaa?

Do Social Security benefits count toward IRMAA? Yes, the taxable portion of your Social Security benefits is used to calculate your MAGI, and MAGI determines your IRMAA.

Does Irmaa affect Part D?

The Medicare Income-Related Monthly Adjustment Amount (IRMAA) is an amount you may have to pay in addition to your Part B or Part D premium if your income is above a certain level.