IRMAA look back period

[Joylush]

I understand stand they look back at the tax years two years prior to turning 65 to determine your IRMAA surcharge. Does anyone know exactly how it works? If you are turning 65 in late 2026 they look at your 2024 and 2025 tax returns.

What if in 2024 your return is unusually high due to the one time capital gain caused by selling a property but then for 2025 your return drops back down to what it more typically is? If the two tax years prior to turning 65 are vastly different from each other which one do they use to determine your surcharge (the higher, the lower and average) ?

 

[GrayHare]

they use the income from the tax return from two caldendar years prior, and IRMAA is recalculated each subsequent year

 

[RetireBy90]

Look back should be to 2024 tax return. I had a big jump in my income for lookback year and I filled a form to request exemption which was approved. Worst case file for exemption and if not approved your 2027 rate will be on this year’s taxes (2025).

 

[audreyh1]

If you start Medicare in late 2026 they will use your 2024 tax return. And then for your Medicare premium payment covering Jan 2027, they will use your 2025 tax return. You will get a bill in December of 2026 for Jan 2027 if you are paying monthly and not already on SS.

 

[sakowitzm]

I understand stand they look back at the tax years two years prior to turning 65 to determine your IRMAA surcharge. Does anyone know exactly how it works? If you are turning 65 in late 2026 they look at your 2024 and 2025 tax returns.

What if in 2024 your return is unusually high due to the one time capital gain caused by selling a property but then for 2025 your return drops back down to what it more typically is? If the two tax years prior to turning 65 are vastly different from each other which one do they use to determine your surcharge (the higher, the lower and average) ?

Simple answer: the "and" in "2024 and 2025" is incorrect. For each year of Medicare they look back to the two year prior period. No "and". Just two years back. When the year changes, the look-back changes.

 

[TheWizard]

Your 2024 tax return, filed sometime in 2025, determines your IRMAA tier for 2026.
Your 2025 tax return, filed sometime in 2026, determines your IRMAA tier for 2027.
And so forth.

A larger than usual AGI due to a large Capital Gains is NOT one of the seven life-changing events that qualify for IRMAA reduction, sorry...

 

[Joylush]

Thanks you all for clarifying. I was not understanding it properly. Now it makes sense to me.

 

[Gumby]

Your 2024 tax return, filed sometime in 2025, determines your IRMAA tier for 2026.
Your 2025 tax return, filed sometime in 2026, determines your IRMAA tier for 2027.
And so forth.

A larger than usual AGI due to a large Capital Gains is NOT one of the seven life-changing events that qualify for IRMAA reduction, sorry...

That's the normal way. However, the AGI could be from more than two years back if you did not file your taxes by October 15th. Then, they use the last filed AGI. See 42 USC Sec 1395r (i)(4)(B)(ii) "Temporary Use of Other Data" https://uscode.house.gov/view.xhtml...lim-title42-section1395r&num=0&edition=prelim

 

[copyright1997reloaded]

One more tidbit - if you do get an exception because your income for this coming year (2025) will be lower, you will be expected to a) list your estimated income for 2025 and b) contact them if your actual 2025 turns out to be different enough to put you in a different bracket.

From the form:

• When we use your estimated MAGI information to make a decision about your income-related monthly adjustment amount, we will later check with the IRS to verify your report.

• If you provide an estimate of your MAGI rather than a copy of your Federal tax return, wewill ask you to provide a copy of your tax return when you file your taxes.

• If your estimate of your MAGI changes, or you amend your tax return for that reason, youwill need to contact us to update our records. If you do not contact us, we may have tomake corrections later including retroactive assessments or refunds.

 

[braumeister]

• If you provide an estimate of your MAGI

When I try to estimate my MAGI, I always get bogged down in the calculations. The units of gold, frankincense, and myrrh are all different, and I can never figure out the correct conversion rates.

 

[sdawson]

Can someone here speak to how the two year look back works when a spouse dies.

Am planning for the future for when I die and my wife is the survivor. The two year look back would be taxes filed for married filing jointly. But as she is now a widow, her IRMAA brackets would be based on single filing status going forward, but looking back two years, the income was based on two people.

 

[sakowitzm]

Death of a spouse is the #1 example of an LCE - Life Changing Event. When you pass in Year X, when your widow files in Year X+2 she can request an exception for IRMAA, given that income was much higher in Year X.

 

[braumeister]

Can someone here speak to how the two year look back works when a spouse dies.

Am planning for the future for when I die and my wife is the survivor. The two year look back would be taxes filed for married filing jointly. But as she is now a widow, her IRMAA brackets would be based on single filing status going forward, but looking back two years, the income was based on two people.

That situation is covered. Death of spouse is a qualifying event, so she would file form SSA-44 with her local SS office and they would take care of it.
Request to lower an Income-Related Monthly Adjustment Amount (IRMAA)

 

[latexman]

IIRC when I filled out my SSA-44 in July (job loss - retired) I gave a corrected modified MAGI for two years, 2024 and 2025. Since they look back two years, you have to correct your modified MAGI for two years, until your modified MAGI catches up to your life changing event.