IRMAA Clarification

[ScaredtoQuit]

I'm confused by the language describing the IRMAA cut-offs. I understand that if my wife and I go over the $176K cut-off in 2021, that we will pay a surcharge on our 2023 medicare premium. But is the comparison made to my 2021 income or my 2019 income? i.e. if my income in 2021 exceeds 176K, do I have to pay a surcharge? I am currently projected to make $174K this year but I have an opportunity to receive an additional $3K in income this year. I have to decide whether or not to defer that income.

 

[Car-Guy]

The amount you make this year 2021 (MAGI) will determine your IRMAA penalty for 2023.


So basically, you make the money this year (2021), then file your 2021 tax return in early 2022 and they'll use that to determine if you pay an IRMAA penalty in 2023 on your Medicare premiums...


Clear as mud?

 

[MissMolly]

Also, it's not calculated on your total income. The income used to determine IRMAA is a form of Modified Adjusted Gross Income (MAGI), but it’s specific to Medicare. The Modified Adjusted Gross Income is different from your Adjusted Gross Income, because some people have additional income sources that have to be added to their AGI in order to determine their IRMAA-specific MAGI.

 

[ScaredtoQuit]

But are they comparing my 2021 income of 174K (or maybe 177K) to the $182K cut-off (or some future amount determined next year) or the $176K cut-off set in 2021?

 

[Niuatoputapu]

2018 MAGI of $174,000 was cut-off for MFJ lowest 2020 Medicare Premiums
2019 MAGI of $176,000 was cut-off for 2021 Medicare Premiums
2020 MAGI of $182,000 was cut-off for 2022 Medicare Premiums

2021 MAGI limit for 2023 Medicare Premiums has not yet been determined.

 

[ScaredtoQuit]

Thank you! That's what I thought it was but I had to make double sure before accepting additional income of only $3,000. The surcharge when added to the taxes would make my net take-home on that little windfall close to zero.

 

[oldtimer]

For an estimate of 2023 IRMAA thresholds that use 2021 MAGI see 2022 2023 Medicare Part B IRMAA Premium Brackets

 

[Koolau]

Fortunately (or unfortunately, depending on your view-point) I only broke through the IRMAA limits "accidentally" because of depreciation recapture on the sale of a rental. It's complicated and not always fully knowable ahead of time. Fortunately, it was only a one-year issue for me. YMMV