[Update on November 18, 2020: My projections for 2021 matched 100% the official numbers.]
Seniors age 65 or older can sign up for Medicare. The government calls people who receive Medicare beneficiaries. Medicare beneficiaries must pay a premium for Medicare Part B that covers doctors’ services and Medicare Part D that covers prescription drugs. The premiums paid by Medicare beneficiaries cover about 25% of the program costs for Part B and Part D. The government pays the other 75%.
Medicare imposes surcharges on higher-income beneficiaries. The theory is that higher-income beneficiaries can afford to pay more for their healthcare. Instead of doing a 25:75 split with the government, they must pay a higher share of the program costs.
The surcharge is called IRMAA, which stands for Income-Related Monthly Adjustment Amount.
I haven’t seen any numbers that show how much collecting IRMAA really helps the government in the grand scheme. I’m guessing very little. One report said 7% of all Medicare beneficiaries pay IRMAA. Suppose the 7% pay double the standard premium, it changes the overall split between the beneficiaries and the government from 25:75 to 27:73. Big deal?
The income used to determine IRMAA is your AGI plus muni bond interest from two years ago. Your 2019 income determines your IRMAA in 2021. Your 2020 income determines your IRMAA in 2022. The untaxed Social Security benefits aren’t included in the income for determining IRMAA.
As if it’s not complicated enough for not moving the needle much, IRMAA is divided into five income brackets. Depending on the income, higher-income beneficiaries pay 35%, 50%, 65%, 80%, or 85% of the program costs instead of 25%. The lines drawn for each bracket can cause a sudden jump in the premiums you pay. If your income crosses over to the next bracket by $1, all of a sudden your Medicare premiums can jump by over $1,000/year. If you are married and both of you are on Medicare, $1 more in income can make the Medicare premiums jump by over $1,000/year for each of you.
* The last bracket on the far right isn’t displayed in the chart.
So if your income is near a bracket cutoff, see if you can manage to keep it down and make it stay in a lower bracket. Using the income from two years ago makes it a little harder. Now in 2020, you don’t know where exactly the brackets will be for 2022. Still, you can make reasonable estimates and give yourself some margin to stay clear of the cutoff points.
2021 IRMAA Brackets
The IRMAA income brackets (except the very last one) started adjusting for inflation in 2020. Here are the IRMAA income brackets for 2020 coverage and the new brackets for 2021 coverage. Before the government publishes the official numbers, I’m able to make projections based on the inflation numbers to date. Rounding rules make it such that the inflation numbers for the upcoming months are unlikely to affect the final results. For example, when a number is rounded to the nearest $1,000, it doesn’t matter whether the number is really $87,600 or $87,800 before rounding. Remember the income on your 2019 tax return (AGI plus muni interest) determines the IRMAA you pay in 2021. The income on your 2020 tax return (to be filed in 2021) determines the IRMAA you pay in 2022.
| Part B Premium | 2020 Coverage (2018 Income) | 2021 Coverage (2019 Income) |
|---|---|---|
| Standard | Single: <= $87,000 Married Filing Jointly: <= $174,000 | Single: <= $88,000 Married Filing Jointly: <= $176,000 |
| Standard * 1.4 | Single: <= $109,000 Married Filing Jointly: <= $218,000 | Single: <= $111,000 Married Filing Jointly: <= $222,000 |
| Standard * 2.0 | Single: <= $136,000 Married Filing Jointly: <= $272,000 | Single: <= $138,000 Married Filing Jointly: <= $276,000 |
| Standard * 2.6 | Single: <= $163,000 Married Filing Jointly: <= $326,000 | Single: <= $165,000 Married Filing Jointly: <= $330,000 |
| Standard * 3.2 | Single: <= $500,000 Married Filing Jointly: <= $750,000 | Single: <= $500,000 Married Filing Jointly: <= $750,000 |
| Standard * 3.4 | Single: > $500,000 Married Filing Jointly: > $750,000 | Single: > $500,000 Married Filing Jointly: > $750,000 |
Higher-income Medicare beneficiaries also pay a surcharge for Part D. The income brackets are the same. The surcharges are relatively smaller in dollars.
2022 IRMAA Brackets
It’s too early to project the income brackets for 2022 coverage. As of December 2020, we only have three data points out of 12 to calculate the brackets for 2022. If inflation in the upcoming months is negative enough, the brackets can go down. I don’t think it’s likely but it’s always a possibility. If I must guess, the range for the first tier will be between $88,000/$176,000 (no change from 2021) and $90,000/$180,000, with the most likely scenario in the middle, i.e. $89,000/$178,000.
The standard Medicare Part B premium is $148.50/month in 2021. A 40% surcharge on the Medicare Part B premium is about $700/year per person or about $1,400/year for a married couple both on Medicare. In the grand scheme, when a couple on Medicare has over $176k in income, they are probably already paying a large amount in taxes. Does making them pay another $1,400/year make that much difference? Nickel-and-diming just annoys people. People caught by surprise when their income crosses over to a higher bracket by just a small amount get mad at the government. Rolling it all into the income tax would be much more effective.
Oh well, if you are on Medicare, watch your income and don’t accidentally cross a line for IRMAA.
IRMAA Appeal
If your income two years ago was higher because you were working at that time and now your income is significantly lower because you retired (“work reduction” or “work stoppage”), you can appeal the IRMAA assessment. The “life-changing events” that make you eligible for an appeal include:
- Death of spouse
- Marriage
- Divorce or annulment
- Work reduction
- Work stoppage
- Loss of income from income producing property
- Loss or reduction of certain kinds of pension income
You file an appeal by filling out the form SSA-44 to show that although your income was higher two years ago, you had a reduction in income now due to one of the life-changing events above. For more information on the appeal, see Medicare Part B Premium Appeals.
Not Penalized For Life
If your income two years ago was higher and you don’t have a life-changing event that makes you qualify for an appeal, you will pay the higher Medicare premiums for one year. IRMAA is re-evaluated every year as your income changes. If your higher income two years ago was due to a one-time event, such as realizing capital gains or taking a large withdrawal from your IRA, when your income comes down in the following year, your IRMAA will also come down automatically. It’s not the end of the world to pay IRMAA for one year.
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FinancialDave says
Harry,
Nice article.
One of the major reasons for many investors problem with IRMAA resides with the size of their taxable account and the investing strategy they use there. Also, in most cases, the first time this shows up is 2 years after they decided (or someone decided for them) it was a good idea to put all their high dividend-paying stocks in the Brokerage account not even realizing that there is an “IRMAA,” let alone that it will add thousands of dollars to their expenses if they go over it.
dennis says
how is the irmaa figured if you were married in 2018 but will be single in 2020? income will be less in 2020 with only person get social security and pension
Harry Sit says
Death of spouse and divorce are two of the qualifying events to appeal the IRMAA assessment. See link in reply to comment #2 below.
Tanya says
Question: In 2019, my husband and I took a large amount from a 401K to purchase our house in cash, so we wouldn’t have a mortgage now that we are retired. We retired in 2016. As a result, we are now in our 2nd year of IRMAA charges, totaling over $800 a month together. Our total income for 2020 was below the threshold for an IRMAA surcharge, and it will also be below the threshold for 2021. Do we have a case to appeal?
Tanya says
I forgot, we also took money in 2018 to pay for a family event. Yes, yes, I know; we did not know about IRMAA, and ignorance is no excuse. But 2 years of this?
Luis says
This IRMMA stuff is one of the most infuriating thing I have seem: if you are high income you pay more while working 2.9 % in all your income( no cap like social security), but then double penalized in medicare premium AND medicare part D, when begins in the Medicare plan, the final number could be incredibly high.Besides they go back two years( by contrast in Obamacare is enough your word regarding income). Good look when you call social security and medicare to explain that you retire and your income is well low. Everything thanks to the liberal politics to penalized the successful people.
Harry Sit says
If your income two years ago was higher because you were working at that time and now your income is significantly lower because you retired, you can appeal the IRMAA assessment.
“You had a major life-changing event that significantly reduced your income” is listed as one of the reasons for appealing, and “work reduction” and “work stoppage” are two life-changing events among others.
https://www.hhs.gov/about/agencies/omha/the-appeals-process/part-b-premium-appeals/index.html
Roger says
Actually, the IRMAA law was passed in 2003, when Republicans controlled the House, Senate and Presidency. However, I agree with your point about tax rates. What makes it more confounding is that you probably had a bunch of tax lowering deductions while working, which are no longer available. To add insult to injury, if you contributed to your IRA (or other retirement plan) regularly, you may find that your retirement income is greater than your working income, with few ways to reduce it due to the Required Minimum Distribution rule.
Rosalie Thomson says
Just be glad you make enough to pay.
Bobby Fischer says
I appealed my IRMAA premium in late 2019 after the new rates were released because I had retired at end of 2018. Income in 2018 was very high but dropped well below the first IRMAA threshold in 2019. I filled out the paperwork, called the local SS office, got an appointment, met with the agent and won the appeal. The agent was nice and did a great job.
Blaming your problems for paying your fair share on those left wing liberals or the radical right wing-nuts doesn’t do anything but show your own ignorance and intolerance. Grow up.
Jon says
IRMAA is pathetically complicated. Only by raising awareness can the public learn what is being done to our elderly who have worked hard to save and invest in order to fund their retirement. IRMAA is a well hidden cost to until one approaches retirement. Each Presidential candidate should be individually questioned and tested on their detailed knowledge of what IRMAA is and how it is calculated. That way voters can determine if each candidate understands what the policies of liberal politics have done…or if the candidate is simply ignorant which is the likely situation. What a wake up call this would be!
FactsPlease says
Liberal Politics? You shouldn’t be allowed to vote. This was part of a Republican (Conservative) bill passed in 2003 and signed into law by George HW Bush:
Medicare Prescription Drug, Improvement, and Modernization Act
Tom Terwilliger says
Yes, it was enacted under the Bush administration, but it wasn’t nearly so bad as long as the threshold was being indexed. That stopped in 2011 when we all know who was in the White House and who had ironclad control of Congress. And “W” was hardly the model conservative; no, anytime the liberal press and others barked, he jumped, and this was one sad example.
But the really immoral aspect of this is the idiotic way “married filing separately” are treated. There is no conceivable reason why they should automatically jump to tier 4, again, just for going $1 over the limit. At least all others only jump 1 tier where the penalty isn’t that great.
d says
indeed a liberal policy; person was correct that this started under Bush (also responsible for Medicare part D) – but if you think Bush was a conservative instead of a flaming liberal you are sadly mistaken!
I pay IRMAA, and as bad as this policy and tax is, wait and see how bad it gets when the liberals take charge.
Read history — when SS started under Roosevelt, the Progressive argued that we “needed” it, and that it was only a 1% tax — now it is a 15% tax!
Laurel says
I’m all in favor of both presidential candidates being “questioned and tested on their detailed knowledge of what IRMAA is and how it is calculated.” Does anyone seriously think the current incumbent has a clue about IRMAA, or that he even cares if you have Medicare coverage?
Patti_G. says
$$$$ rip offs like IRMMA is the least of it for decent older Americans. The only way doctors can keep their Medicare designation is that Medicare forces these doctors to prescribe pills and medical devices to keep Big Pharma in business. If a Medicare doctor is trying to keep their patients well, that is not the goal of Medicare, and they are kicked off. It is beyond diabolical. But, yes, Democrats scour doctors notes moreso to kick them off.
Kenneth Setter says
Patti G. : This has to be one of the most uninformed posts I’ve seen in quite a while. Medicare DOES NOT push prescribing pills and medical devices. Medicare physicians DO NOT get “kicked off” for trying to keep their patients well. And Democrats DO NOT have access to medical records to scour them for anything. This is pure rubbish.
Patti_G. says
To Kenneth,
You must be a Democrat or else not old enough to be on Medicare yourself. Another thing Big Pharma in connection with medical scoring is doing is decreasing the range of what is deemed in the ‘healthy range’ when getting blood tests….just so they can give you a pill for your cholesterol. And now with corvid, the whole medical field has become totally corrupted.
Kenneth Setter says
To Patti_G.: I am old enough to be on Medicare for over 5 years. Yes, I am a Democrat, and judging from your unfounded criticism of Democrats in your original post, I assume you are a Republican. That should not matter if we are discussing differences of opinion, not alternate sets of facts. My concern was that you were making statements about Medicare that are not true.
I am also a physician and I can tell you that the changing of normal ranges for blood tests is something that happens all the time. It is not due to a conspiracy by “Big Pharma”, but part of changes that occur in medicine all the time as additional research refines our knowledge. I have my share of criticisms for the pharmaceutical industry but this is not one of them,
Patti_G. says
To Kenneth,
Have you ever been a Medicare provider? Then you would know. And no, I do not consider myself a Republican. But alas, this thread is about IRMMA and we’ve strayed OT.
Lucy Yore says
This is a great article and I wish I’d had this information available to me when I started challenging my own IRMAA. The IRMAA premium “adjustment” came as a surprise to me, too. After working for fifty years, paying taxes, and never using unemployment insurance or disability benefits, I never expected that my reward for paying my way was to be assessed higher Medicare Part B premiums. I retired in 2018 and became eligible for Medicare in July 2019. In 2019, the “look back” income used to determine whether or not I would owe IRMAA was my adjusted gross income on my 2017 tax returns. Because I retired in 2018 and my 2019 adjusted gross income would be significantly less than it was in 2017, I appealed the original decision to raise my Medicare Part B premium. I am a firm believer in dealing, whenever possible, with matters like this face to face. I skipped asking for help by phone and went to my local Social Security office. The first person I met with didn’t use the correct amount of after-retirement income I expect in 2019, and my first appeal was denied. So I made a second trip to re-submit my appeal. The person I met with the second time recognized immediately the mistake the first person had made, corrected it and re-submitted the appeal. Within a week I received a letter from Medicare notifying me that my appeal had been accepted and that I would only owe the ordinary Medicare Part B premium. My perseverance has saved me over $200 a month. If you have been unfairly assessed an IRMAA increase in your premium, appeal the decision in person, and don’t give up until your appeal has been granted.
Kenneth Setter says
In 2020 with the COVID problems, the local offices are all working online – no face to face meetings. I retired the first of this year and made application to have IRMAA removed once I knew pretty closely what my 2020 income would be. The phone experience was MUCH better than going and sitting in the SS office half the day. The agent I dealt with was very knowledgable and told me exactly what they needed – mainly just the SSA-44 forms, documentation to establish that I had retired, and an estimate of what my 2020 income would be. They take your word for it but you have to send a copy of your 2020 tax return when it is filed to document that you were actually below the thresholds. I sent the documents and a letter of explanation. The approval of the removal of the IRMAA happened within 5 days (the agent thought it might take 1-2 weeks). I was due refunds for the 6-7 months of IRMAA we had already paid in 2020 and these were deposited in my checking account within another 2 weeks. All in all a very easy process. I hope they never go back to face to face meetings.
Lucy Yore says
Kenneth Setter – thanks for your thoughtful reply. My experience was pre-COVID. I initially tried to handle my situation by phone, and the person I spoke with was clueless, didn’t know the IRMMA appeal procees, and told me that I owed based on prior income. Not helpful at all. Once I spoke person-person at the SS office, the matter was settled quickly.
Roger says
I had a similar experience, but a phone call worked fine for me. One call to say my wife and I retired and they refunded the IRMAA that had already been collected.
IRMAA Needs to Go says
To be excruciatingly precise, can we state that the bracket amounts (when finalized) for calendar year 2020 will be used with the calendar year 2018 income amount to determine the amount of IRMAA, if any, a medicare recipient would be assessed by CMS/SS during calendar year 2020? Similarly, the CY 2021 bracket amounts would be used with CY 2019 income to determine IRMAA to be assessed/paid during CY 2021?
Harry Sit says
Yes your AGI plus tax-exempt interest reported on your 2018 tax return (filed in 2019) will be checked against the bracket numbers in the 2020 column to determine the Medicare Part B and Part D premiums you will pay starting in January 2020. My table only showed Part B. Part D uses the same brackets but different surcharges.
sscrla says
Since the August, 2019 CPI numbers were announced on September 12 and the law says the inflation adjustment is based on “the percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period ending with August 2006 (or, in the case of a calendar year beginning with 2020, August 2018),” you now know all the numbers. Therefore, there is no need to use the word projected, unless you expect the BLS to revise an already published CPI figure.
Ken says
The ability to not take the 2020 RMD will also affect your IRMAA calculation for 2022.
Harry Sit says
This was posted on September 3, before the latest CPI release, which now confirmed all the numbers in the table.
CHRIS KELLY says
What about the 2 years we went from 104 dollars to 136 dollars ? This is monthly. That is 32 dollars a month for 2 years. Do we get reimbursed.
gary says
i have seen 2 articles that used the cpi and have different results. another article used the same 1.7% and showed the first bracket increasing to 86,000 not 87,000 because 85,000 with a 1.7% increase is 86,445.xx so the nearest number rounded down. So it is already rounded up (87,000) or is it rounded to the nearest 1000 which would mean it shouldbe 86,000?
Harry Sit says
It is rounded to the nearest $1,000 but the 1.7% number used in the other article isn’t correct. The correct CPI increase to use is 1.9%. When you raise $85,000 by 1.9%, it rounds to $87,000.
gary says
I check the gov’t cpi website and it is showing annual for august of 1.7% is it a different month that is used sep 2018 cpi was 252.146 and aug 2019 256.558 which is 1.7%. is it a different indicator or timeframe?
Harry Sit says
See comment #6 above.
Marcia Mantell says
There is a typo in your bracket for single filers: second row. Should be above $85k up to $107 (not $170). That also throws off your 2020 estimate. Please correct. Thanks!
Harry Sit says
The table is correct. $170k is the threshold for paying 1.4x standard premium for married filing jointly. $107k is the threshold for paying 2.0x standard premium for single.
Bob says
I have been paying irmaa for three years and I understand the concept and I can manage my income. I file married/joint tax return. I am currently projecting MAGI of $212,000 for 2019 tax year. How much higher can I push my income before moving to the next irmaa bracket?
Harry Sit says
The next bracket starts at $218k in 2020. If you add 1.5% inflation, you get $221k for 2021. If you’d like to avoid surprises, you may want to stay below $220k.
Sammy III says
When will medicare come out with the final part b premiums and irmaa surcharge for 2020?
Harry Sit says
Hopefully soon. They announced on October 12th in 2018.
BobH says
We have kept my future wife income below 85K. She will be retiring in Jan 2020 because she has PPO time that will bump her above 85K so we delayed the retirement to Jan 2020. So, could I do a 70K Roth conversions in 2019 which would cause her income to be about 85+70= 155K. Then file the life changing event of not working SSA-44. Her IRA withdrawal in retirement will be about 60K a year normally. If they throw out her salary then we would be below 85K.
The Wizard says
Nothing wrong with higher income oldies paying a little more for Medicare; I always will be under current law. But it’s good to project your AGI into your 70’s and then not do Roth conversions in your 60’s that are TOO big for your present IRMAA bracket. I call this Levelizing your AGI…
Rich Tedoni says
Approximately when will the IRS send the 2018 agi to medicare/SS to determine if there will be an IRRMA
Harry Sit says
No idea, but if by the time they charge you the Medicare premium for January they still haven’t figured it out, they will eventually bill you the difference when they determine you are subject to IRMAA.
Joe Pereira says
November 2020 I turn 65 I been getting social security pay from 62, my total income is lower than the normal threshold bracket, however in 2018 I received money from my 401K causing a high income for the year 2018. for 2019 I’m back to a normal income, according to social security my Medicare start in November 1st 2020, I’m a little confused if medicare irmaa
part B and D surcharge going to apply for the whole year 2020 or year 2021
Cynthia Siebert says
I was notified that I will be paying an IRMAA fee starting January 2020 due to us withdrawal from IRA… This was a one time withdrawal! Can I go to SS office in March and show them my income from 2019 is MUCH lower now and get rid of the IRMAA?
Harry Sit says
Just showing it was one-time IRA withdrawal isn’t enough. You need to show one of seven qualifying life-changing events:
– Death of spouse
– Marriage
– Divorce or annulment
– Work reduction
– Work stoppage
– Loss of income from income producing property
– Loss or reduction of certain kinds of pension income
MRO says
I recently started with Medicare and am paying IRMAA adjustments for Parts B and D. I am healthy and do not take any prescription drugs. My premium for Part D just increased as will my IRMAA for Part D as well I imagine. I do not believe in paying the IRMAA penalty (for Part D knowing that I have no choice with Part B) and only wanted to be compliant by taking Part D but am planning on dropping it as my premium increased and my tolerance decreased. My question is if I am not participating in Part D am I still responsible for paying the IRMAA penalty or does it go away as well?
Harry Sit says
Medicare Part D IRMAA basically means a higher price for Part D. If you drop Part D you don’t pay it any more. However, if you re-enroll in Part D at a later time, you may pay a permanent penalty based on the number of months you went without it.
https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/part-d-late-enrollment-penalty
IRMAAA Need to Go says
Maybe I missed it in the comments here, but doesn’t the “2020” table at the bottom of this web page https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance prove (finally) that the IRMAA threshold has been announced as $174K for the first bracket above baseline?
IRMAA Needs to Go says
Sorry, forgot to mention that you have to click on the Part D in the page to see the rest of the text which includes the tables.
Harry Sit says
Yes! All the other bracket cutoffs match what I had here as well. No idea why they buried them so deeply.
Robert Burger says
IRMAA is not just determined by AGI plus muni bonds. It is actually AGI plus all un-taxed income.
Harry Sit says
Not all untaxed income. Untaxed Social Security benefits are not included in the definition of Modified AGI for Medicare. See Table I starting on page 5 of this PDF document:
The Use of Modified Adjusted Gross Income (MAGI) in Federal Health Programs
Ann Brown says
If the CPI used to determine the percentage increase (CPI-U?) were to show a negative number, would the brackets stay intact or would they be adjusted downwards? I can manage my income but the underlying question is whether I can be assured that the $87K threshhold for single filers would at least remain the same in future years.
Harry Sit says
The law only talks about “increase” and “exceed.” I assume it means if the change is negative they will just freeze in place until inflation catches up. We haven’t seen a real example of negative inflation since IRMAA went into effect though.
Ann Brown says
Thank you for your prompt response. I agree we haven’t seen a real example of negative inflation since IRMAA but we are seeing other unexpected financial developments (increasing talk of negative interest rates in the US, for example). The fact that the thresholds are based on events 2 years in the past means that there could be an unpleasant surprise in store at some point.
We can rail against IRMAA (and I agree with all the comments) and it would certainly be frustrating to fall into the next higher threshold by a few dollars. On the other hand being impacted by IRMAA signals that we have some meaningful/above average level of income. As a 16 year old, I remember complaining to my father about the deductions and taxes in my first paycheck. His question to me: “Would you rather have the income and pay taxes on it or not have it and not pay taxes on it?” In my volunteer work I see seniors who are just keeping their heads above water (for various reasons) so I feel grateful to have an IRMAA concern.
Thank you again, I appreciate all the great information.
Han Ngo says
IRMAA is so confused.
I am paying IRMAA for my medicare part B. My wife will be eligible for medicare next year, will she pay the same amount of IRMAA as I do? I think for a married couple, they should only pay IRMAA once, not both husband and wife have to pay IRMAA because it counts and is calculated for a married couple. If both husband and wife have to pay IRMAA on each account, is it a double dip?
Thank you.
Harry Sit says
If you are married filing jointly, when the joint income exceeds the threshold, both of you will pay IRMAA.
Sharon Wallace says
Why can’t I find out ANYTHING about the Part D IRMAA surcharges for 2020?? I find all kinds of info for the Part B…but not Part D.
Harry Sit says
Click on the link in comment #19. Then click on the link at the bottom of that page for Part D.
Bob Land says
What happens if your MAGI drops 2 brackets? Will the tax brackets be lowered two steps at once or one at a time/year in the reduction of the additional insurance premiums?
Harry Sit says
At once. Whichever bracket your income two years ago belongs, you pay the corresponding premium.
John Tenfelder says
If I get married in Dec 2019 to a woman who earned less than $80,000 annually in 2017, 2018, and 2019, but I made enough to put me in the IRMAA B/D 320%/574% bracket in each of those years, will she still be charged zero IRMAA or will she be charged in my bracket retroactively for 2019 (based on my 2017 AGI) if we file jointly in 2019? What about 2020 and 2021? Are our then single incomes used?
Harry Sit says
Not retroactively. She will pay IRMAA starting in 2021 based your joint 2019 tax return to be filed in 2020, but your IRMAA in 2021 may drop a tier or two based on your married status.
Caught in the Middle says
One thing not mentioned here is if you are married but file separately (and are over the lowest bracket) you have to pay the 3.2 rate regardless of your individual MAGI.
Planning Stage says
What if you downsized in retirement and found selling your house left you with enough taxable capital gains to push you into the next IRMAA bracket? I don’t see any option in the appeals process link for such a situation. Would both my wife and I both be penalized for life?
Harry Sit says
Not for life. Your higher income in one year only triggers IRMAA for one year. When your income falls back down the following year, you will stop paying IRMAA.
Tony Frank says
Medicare is worse than private industry. Increase monthly social security payments by 1.6% versus 7% increases in Parts A, B and D medicare premiums.
No wonder so many retirees are or will be eating spam, assuming they can afford it.
A bunch of predators in dc.
Linda Somma says
My husband died in May 2018 and We filed married that year. My Part B/D premium for 2020 will be in the second tier (twice as much as the standard tier) due to higher income.
In 2019 my MAGI is half of what my husband and I earned in 2018. When I file SINGLE for 2019, I’ll still be in the second tier. is there any reason I should appeal?
Anna Carlucci says
the first qualifying life-changing event listed to file an appeal of the IRMMA is death of a spouse……seems you can appeal
Thomas Schamp says
There are seven life changing events that can be the basis for an appeal. It’s not clear that you qualify for any of them…
Sherry Wiser says
I turned 65 in Oct 2019…I was charged an IRMAA because in 2017 I went over the $85000 AGI. However, that was because I withdrew $50000 to purchase a new vehicle which I had been saving for while I was working. The 2 years before and the 2 years after 2017 my AGI was/is approximately 45,000. Does the Medicare/Social Security Dept. look at your AGI each year? If you are accessed an IRMAA the first year you get Medicare, will you always be charged that IRMAA in the future years? Will my IRS Tax Returns be looked at again for the year 2018 for 2020 Medicare payments and the IRMAA not applied…Or do I need to go to the Social Security office and appeal?
Harry Sit says
Your income is looked at each year. When it comes down you will stop paying IRMAA.
The Wizard says
This is why it’s usually a good idea to “Levelize” your AGI from year to year in retirement, including withdrawals from tax-deferred for Roth conversion…
Sherry Wiser says
Harry
Thank you so much for taking the time to answer my question and all of the other questions as well.
SBW
Sherry Wiser says
The Wizard
Thanks for your input…I now realize that I should have done that…25000 in 2017 and 25000 in 2018…However, I was NOT aware that there was a additional charge (IRMAA) if you went over a certain amount. And had no idea that they would go back two (2) years for your AGI.
Thank you
SBWiser
Joe P says
You charged irmaa for 2019..did you received another letter from SS for the normal amount for 2020 since you income dropped to $45000..
I’m in the same situation they charge me irmaa for the month of November And December 2019, because I sold some stock in 2017 to buy a home..I hope they look again at my 2018 my income was around $60000 I dont want pay irmaa for 2020 since my income is $60000 ..any suggestions what to do..thank you
Sherry Wiser says
Joe P
I just read my letter from SS and beginning in Jan. 2020, my SS deposit will NOT have the IRMAA deduction. YAY!!! Everything is back to normal.
Joe P says
Great that’s good news
Richard Persram says
I would appreciate any guidance on IRMAA determination. Is the information SSA provided this morning correct?
I retired in April of 2019 and started Part B in May 2019. I was immediately hit with IRMAA which I expected and my initial determination was based on 2017 taxes. My income for 2017 through 2019 places me above the IRMAA MAGI limit.
I called Social Security this morning to gain a better understanding of the IRMAA appeal process.
I was told that since 2020 would be the first year in which my income falls below the IRMAA limits, I would have to wait for 2021 to file form SSA-44 and if my income was below the IRMAA limit, they would then retroactively credit me my IRMAA payments for the entire year of 2020.
I thought previous to my call, that I could file SSA-44 now or early 2020 and they would use my 2020 income estimate from SSA-44f for the 2020 IRMAA determination.
The Wizard says
That info sounds correct and was what I did. I had $35,000 of part-time W2 income in 2016 on top of retirement income which put me in a higher IRMAA tier for 2018.
I did my taxes for 2017 (with zero W2 income) in February 2018 and then sent in form SSA-44 with a copy of my 2017 form 1040. They accepted that and put me back in a lower IRMAA tier for 2018, refunding the overcharge for the first few months…
Winston Bowen says
Harry Sit writes that if your income drops to lower IRMAA brackets you will automatically be dropped into the new category and pay that rate for Parts B and D. I just got my 2020 earnings summary, and while they show the lower MAGI they have kept me and my wife in the previous, higher bracket and show our IRMAA payments at the higher amount. How do we appeal?
Ken says
I have purposely stayed under the MFJ $170k MAGI to avoid and IRMMA surcharges the past few years of retirement. In 2019, I want to make a larger than usual IRA withdrawal that will bring the MAGI into the IRMMA surcharge category, and I would like to come close to the ceiling for the first level (of 40% B, & D surcharge), which for MFJ has been $214K for several years. It is now dawning on me that there is no place to lookup what the IRMMA $$ brackets will be in 2021, since my reading is telling me that the 2019 one that is published, is not for tax year 2019 MAGI, but is being used for current 2019 year IRMMA surcharges on 2017 MAGI. Does it even make sense that we don’t know the ceiling that will apply in 2021 when they penalize us for our 2019 MAGI, or do I have this wrong???? IF that is true, am I safe, if I stick with the $218K that is announced for 2020 (to be used for 2018 MAGI brackets)? It seems that one should know the different ceilings prior to making a mistake in a current tax year that could bump you into an even higher bracket when assessed 2 years later, or make you go over the ceiling for no surcharge, which has been $170k for me the past few years. I guess I am just figuring out that it is more confusing than I thought. ANY THOUGHTS WOULD BE APPRECIATED!
Harry Sit says
Yes the 2021 brackets will be for your MAGI in 2019. The numbers should be slightly higher than those for 2020. If you keep your 2019 MAGI under the published numbers for 2020 you should be OK in 2021.
brian birner says
I submitted the form SSA-44 to my local Social Security office about three weeks ago. Do you know how long it takes to process this form?
I had a recent reduction in income. This was in reference to my IRMAA.
Thank you
Bob L. says
I am curious that the incremental increase for the top bracket(>750,000) is significantly less the lower ones. I’m guessing that may be because the total amount cannot exceed the average cost of each program. Is that correct?
Harry Sit says
The shares of program cost paid in each IRMAA bracket are 35%, 50%, 65%, 80%, and 85%. Congress could’ve made the top bracket pay 90%, 95%, or 100% of the program cost but they stopped at 85%.
Songbill says
Yikes! I just learned about the existence of the IRMAA surcharge. We have had our joint MAGI stay under the IRMAA threshold every year since I retired over 5 years ago. However, this year we get to enjoy a one-time-only, unusually massive capital gains on a particular stock we’ve owned for the past 15 years. (Our NYSE-listed firm was bought out by a much larger NYSE firm that paid a total cash buy-out to shareholders rather than offering stock shares conversion, thus we’re experiencing the capital gains — whether we wanted it or not.)
I’ve looked at your chart and done some computations and can see that I and my wife’s monthly Medicare premiums (+IRMMA) will rise from the standard basic deduction from Social Security benefits ($135 per month per person) to at least $462 per month PER PERSON starting in 2021. Not happy with this discovery but OK, I understand that is what the IRMMA calls for. HERE IS MY CONCERN: After our annual AGI drops back down, for 2020, to the level of just a standard basic Medicare premium, how do I get the SS & Medicare folks to NOT keep taking out $462 per month out of each of our SS benefits during 2022? They do a “two year look back” in doing their calculations, not an annual one, so who should I talk to or what should I do after I file my Federal taxes in 2021, for year 2020, in order to prevent them from taking out the $462 each month for a second full year (2022)?
The Wizard says
They do the 2-year lookback thing Every Year.
So you should just have a single year of elevated IRMAA payments…
Doron Steger says
Do IRMAA Medicare part B charges apply to families in Medicare Advantage Programs?
Do IRMAA Medicare Part D charges apply to families receiving drug coverage in Medicare Advantage Programs?
Thanks!
The Wizard says
Yes and yes. This is exactly what I have and I will be paying IRMAA “forever”…
b. lolr says
I am so confused with IRMAA this year. I want to do a Roth conversion again in 2019, (next 2 weeks) which will put me in Tier 2 of IRMAA in 2021. I am trying to figure out what the MAGI cutoff is for my 2019 tax return so I can determine how much I can convert from Traditional to Roth without going into Tier 3 in 2021. Should I stop at $213,999 or 217,999?
Any help will be appreciated!
The Wizard says
We won’t know the tier thresholds for 2021 based on 2019 MAGI until 11 months from now.
But you can safely get your MAGI up to $218k, MFJ, which is this years threshold.
Any higher and you’re betting on what next year’s inflation percentage will be. Not good to lose that bet…
b lolr says
What does MFJ stand for?
Ken Fitzgerald says
b lolr, MFJ = Married Filing Jointly (for tax return)
Bev Lolr says
If I can safely get the MAGI to $218K for tax year 2019 and remain in Tier 2, that answers my question. Now instead of staying at $214K for Tier 2, they are going to be inflation adjusted, right? Thanks again.
Gail says
Can you explain why people collecting social security who are married but file separate returns are penalized with a substantially higher irmaa? For married filing separately, there is no tier 1-2-3, irmaa starts at tier 4? Isn’t this actual discrimination?
Harry Sit says
When they do something to collect revenue, they don’t want to see it easily defeated by couples rearranging their income and filing separately. Suppose a married couple’s income is $300k. If they file jointly, they will pay $376/month each in 2020. If the couple split their income to $80k for one and $220k for the other, they will pay $144.60 plus $462.70, which is already less than $376 * 2. If Congress didn’t make the higher income person go to tier 4, IRMAA will be defeated even more.
Gail says
In my case, i was over the limit by 4000.00, I asked that be used to pay irs taxes on a roth conversion. When they wanted to add almost 400 per month to my medicare costs, i was angry. I do understand your explanation, but I don’t agree. My spouse barely made 50000. So we filed an amended return jointly whech fell well below the limit.
Thus, instead of collecting an additional 4665.60 (388.80/month) from me they ended up getting no irmaa at all.
I wish to add that if they had fairly assessed the irmaa at 66.50 per month, I would have paid without question. Social security has always been based on individuals, earning etc, never before has my marital status been used against me.
There are reasons for filing separate returns that have nothing to do with avoiding taxes. So, I still feel that the assessment of excessive payments to people who file separately to be severely discriminatory.
The Wizard says
Looking forward, it’s generally better to withdraw amounts from tax-deferred each year to keep your AGI just slightly increasing and below the next IRMAA tier threshold. As opposed to withdrawing a lump in one year for a large purchase like a new car.
Good news is, your additional IRMAA amount is for only the twelve monthly payments in 2020, after which it should go away, assuming your 2019 MAGI was low enough…
IBM says
Don’t forget to thank President Obama for adding in the Part D IRMMA
Harry Sit says
See reply to comment #3. IRMAA came about in 2003, as a part of the law that created Medicare Part D. President George W. Bush signed it.
David Taylor says
In their booklet “Medicare Premiums: Rules For Higher-Income Beneficiaries” the Medicare folks claim that only 5% of Medicare recipients quality for IRMAA. But every independent survey of personal income that I can find claims that at least 20% of all seniors make more than $87,000! So, is the government just lying to us, or am I missing something?
Kenneth Fitzgerald says
Perhaps many of the over $87K retirees you have seen cited in those counts have a spouse who is not in the same category (in the other 80% of retirees), and together they stay under the now $174K Married Filing Jointly limit before IRMMA affects them?
The Wizard says
I’m not sure how this matters. My AGI is way over the starting point for IRMAA and always will be. So I pay a bit more for Medicare than lower income folks do.
I’m perfectly okay with that…
Ed says
I’m not. Let’s make it voluntary for all you people who feel good because paying IRMAA means you earned more.
David Taylor says
You might be right. On the other hand, you shouldn’t be. Those counts just say “individual” income, and to me that means unmarried. If they are indeed including individual incomes within married couples, then that is very confusing. Sigh. That’s the trouble with the three-word data descriptions you find on-line. You are never quite sure what assumptions they are making.
David Taylor says
To The Wizard: If the percent of seniors affected by IRMAA is really 20% rather than 5%, then the government should admit it. A government that lies is not a good thing. The IRMAA booklet almost apologizes for IRMAA by implying that it is not a big deal because “only” 5% pay it. Is this Truth? Or propaganda? Or imaginative accounting? I’d like to know.
Ed says
Doesn’t matter what the percentage is, it’s an abomination of a success penalty. Standard government garbage. Does anyone think a private business could charge wealthy people extra for their product?
The Wizard says
Yes, I completely agree that we want truthful info. The lower IRMAA tiers are x2 for MFJ vs Single so not so hard for them to report.
But my impression is that Medicare is underfunded, rather than generating a surplus each year. So an IRMAA-like scheme for higher income oldies seems to make sense…
Larry Burdick says
I have had a two-year stepdown in terms of retirement and income reduction. I have filed requests for IRMMA reconsideration a couple times and after some hassle, have had both approved. Here is my problem, I filed the paperwork in early 2019 so my wife (the only one of us getting Medicare that year) would have here IRMMA based upon an estimated 2019 income instead of our much higher, preretirement income from 2017. Well, my estimated was between the $170,000 and $214,000 bracket. I was sloppy last year relative to income, and when I did my taxes last week, my 2019 income was $214,023!! Now, not sure what to do. Do I report this or just let it “catch up” to me in the future for the expected payback for the IRMMA required for the next higher bracket. And, I just got them to adjust our premium for 2020 for the estimated much lower income we will have, which I worry will be all fouled up again. Ugh.
Larry Burdick says
From Harry (above):
Yes the 2021 brackets will be for your MAGI in 2019. The numbers should be slightly higher than those for 2020. If you keep your 2019 MAGI under the published numbers for 2020 you should be OK in 2021.
So Harry, am I okay? Is the $214,000 or $218,000 what is used for 2019 AGI? So confusing . . .
Harry Sit says
In late 2020, Medicare will announce a new number, which will be used to measure against your 2019 MAGI, to determine how much you will pay IRMAA in 2021. If the inflation is positive, which is usually the case, that number for the second tier should be slightly higher than $218,000. If the inflation is negative, it can also be lower. We don’t know what that number will be until later this year.
Tom K. says
More lame fake news from the right. It was during W’s reign, not Obama’s that IRMAA was added. With Trump driving us further into debt, and Congressional republicans too afraid of him to find their spines, be prepared for even more increases in the future, and not just to IRMAA. True facts matter…
The Wizard says
I’m not sure we care about when or under whose admin that IRMAA got started.
It’s a good way for us wealthy folks to help the poor people.
What’s wrong with that?
Ria jensen says
I personally worked hard to put as much income away as possible in my 401K. I’m a single parent and tax status is the same. My retirement income from former employer plus social security has my earnings at less then 40% of my pre retirement income. I never asked nor received any government assistance, etc during the 48 years I worked. But now that I can fix my home, make travel plans etc I find Im going to pay the IRMAA because I was smart in saving. The amount I’m going to pay has taken away a good portion of my plans. So yes, I have a problem with paying this. I’m not rich, I saved and now I cannot live as I planned in retirement. Not fair to middle class citizens like myself I also pay for supplemental insurance and a drug plan Based upon calculations, I’ll be paying over $700 a month for insurance; that’s insane.
Ed says
Do you really think this helps poor people? You’re fooling yourself.
Kenneth Fitzgerald says
Tom K- I think the earlier poster ‘s comment was that that Obama added the newer Part D surcharge to (the already existing) IRMMA, and not that Obama created IRMMA.
David Walton says
I retired in 2019 at 65. I am married and my wife and I had enough income to be affected by IRMMA. My wife is younger and continued to work until mid year 2019 when she retired but she is not 65 and is not eligible for Medicare. Our income for 2019 was more than in 2018 due to significant bonuses. In 2020 however we will have significant reduction in income. If I appeal IRMMA now, because of our retirements, would I likely be eligible for a reduction in the premium? In other words would my Medicare premium for 2020 likely be adjusted based on our estimated 2020 income?
Ken says
My brother had the same problem when he retired in Jan 2018, and it straddled two tax years, in terms of high income in 2017, and again in year he was was retired for 11 months at age 70. He appealed it two times, (for 2019 and 2020 surcharges) and got relief on both. I don’t think you can appeal it until you get the letter telling you that IRMMA has kicked in. For him, it was December of the year before the hike was taking effect, so for you, I guess your first letter will be in Dec 2020, for 2021 IRMMA surchange based on 2019 tax return income. If they already assessed a surcharge for 2020 Medicare cost, based on your 2018 income, before retirement, you should certainly appeal that now, and should have gotten a letter about Dec 2019. No expert here, just going on what I read and heard about it.
CathyKate says
I agree with Tom T.
I don’t understand why married filing separate jumps from the Part D first tier to tier 4. If you make a dollar over $85,000 you are put in a category that goes up to $415,000. If someone could explain that I would surely appreciate it.
Thank you
sscritic says
There is an ACA subsidy. When you make too much, you lose your subsidy. No one calls it a surcharge.
IRMAA is no different; it is a reduction in your subsidy. All you have to do is read the law:
“(i) Reduction in Premium Subsidy Based on Income.—
(1) In general.—In the case of an individual whose modified adjusted gross income exceeds the threshold amount under paragraph (2), the monthly amount of the premium subsidy applicable to the premium under this section for a month after December 2006 shall be reduced (and the monthly premium shall be increased) by the monthly adjustment amount specified in paragraph (3).”
V.F. says
My spouse died from Covid 19 this year but I will file joint tax return. If I convert a large sum from IRA to Roth IRA it will make my MAGI approach 213K. What will my premium surcharge be in 2022 when I will file as single? Is it $60 if my income as a single taxpayer is less than $109K in 2022 or is it $144.60 because 2 years earlier joint income was 213K, assuming Medicare premiums and surcharges don’t change between 2021 and 2022?
Ken Fitzgerald says
I found this article had a lot of info about IRMMA. It may help you. Note the IRMMA APPEAL section that may work for you once you get the surcharge notice.
https://thefinancebuff.com/medicare-irmaa-income-brackets.html
Vince Pellettier says
Was your column updated for new cpi-u figures on August 12,2020? You said 2021 brackets should be $88k/$176k because of rounding up each $1000 but I’m thinking there maybe won’t be an increase from $87/$174. Someone said they are now using chained (c-cpi-u) instead of cpi-u. Do they also use seasonally adjusted cpi? I guess there’s one more month of figures so nothing is definite but we are at $174,174 for income 2019 so I’d like to see a little increase. I wish it wasn’t rounded up by $1000 because they may not adjust anything is there is just a small increase.
Harry Sit says
The July CPI released on August 12 didn’t change the projections. Even if the August CPI goes back to the low seen in April, the first bracket for 2021 will still be $88k/$176k.
MJM says
When during the year do IRMAA adjustments occur (January 1 or based on my initial Medicare sign-up date)?
Ken says
The IRMAA surcharges are by calendar year starting in January. Tha date you started is immaterial.
Eric says
Is the non-taxable portion of social security benefits included in MAGI? I see contradictory information on the internet.
Harry Sit says
The non-taxable portion of Social Security benefits is not included in the definition of MAGI for Medicare. See reply to comment #20.
Vince says
The CPI-U figures came out an hour ago at 1.3% so can you know calculate exactly what the new high income brackets will be for 2021? Would you take $87,000 x 1.3% = $1131 and $88,131 ($88,000 rounded down)? And thus $176,000 for joint?
Or do you have to wait for more info from the government? Thanks Harry
Harry Sit says
The latest CPI data point confirms the numbers in the blog post. The first tier for IRMAA in 2021 will be $88k for single and $176k for married filing jointly, based on income in 2019.
vince says
I was reading about this on another blog and they said something about comparing the 12 month August 2020 inflation figures released on 9/11/20 to a different 2018 baseline for the true income tier levels that will be released next month. Harry do you know about the inflation adjustment code they are referring to? Are you 100% confident on your $88k/$176k figures?
Harry Sit says
I’m confident in the numbers. See comment #6 for the calculation method.
Carl Widerquist says
So will the MFJ 2020 income bracket of $272000 definitively go to $27200 X 1.3% = 275536 and then be rounded up to $276000 for 2021? Thxs
Harry Sit says
It’s not exactly calculated that way, but yes the limit for the third tier in 2021 will be $276,000 (based on 2019 income), as shown in the table.
Regina C. says
Why are IRMAA surcharges based on cliff thresholds, rather than going along the lines of IRA marginal tax rates? Just because you went over $1 and now you are in the next IRMAA bracket for Medicare Part B as well as Part D Premiums is TOTALLY shocking. even though it is for one year!
Any chance of this being changed in the future?
Songbill says
It’s because you are wealthy and can afford it. Politicians who passed the IRMAA law demand that you pay your “fair share”. Very, very few people are affected so that’s why the cliff is “fair”. My wife and I (in our 70’s) are having to fork over 40% of our total Social Security payments this year (through automatic deductions) because we just missed an IRMAA cutoff level. If the Federal Income Tax rates had these cliffs, taxpayers would go bezzerk. But Congress would never enact them because they’d get run out of office.
Will Congress get rid of the IRMAA cliffs? No.
Terry says
As a Medicare broker, I consider this a penalty to those who’ve worked hard, saved, invested and provided a wonderful lifestyle for themselves and their families.
It’s so hard to explain to people that it’s anything other than a “good job!” penalty.
Ed says
How true. Nothing like penalizing success.
Walt says
Good points, other than the “working hard” part. People here in Houston who put roofs on houses in the hot summer sun work as hard, or harder, than people who make considerably more money. It is definitely not a tax on “working hard.”
Ed says
The whole IRMAA thing infuriates me. The concept is just so much bull excrement and the execution (the $1 trigger) just adds insult to injury. Only a government bureaucrat could have dreamed that one up. If a person is subject to IRMAA they probably had high earnings while working and therefore paid far more than average in a Medicare taxes. Seems like double taxation or a good imitation of it. The only silver lining is when you turn 70 1/2 you can make your charitable contributions with Qualified Charitable Distributions, QCDs, from your IRA. They don’t increase your MGI. My great conservative Congressional delegation isn’t interested in doing anything about it. Neither is AARP or AMAC. So much for supporting their membership. Nor is my former union which has a lot of members who will ultimately be subject to this ridiculous law/theft. For those who are happy to pay it as it means they had a high income my tax accountant friend had a stronger term than bull excrement.
Carl says
Thank you for the response to #75. You stated that the number $276000 is correct but the calculation used was not correct. Since I will likely be going through this exercise every year, would you please give me the correct calculation. FYI, I reviewed point 6 several time but frankly I still do not understand what I did wrong. Thanks in advance.
Harry Sit says
Get 12 monthly CPI-U numbers from September 2019 to August 2020. Add them up and divide by 12 to get the average. Get monthly CPI-U numbers from September 2017 to August 2018. Add them up and divide by 12 to get the average. Find the increase between the two averages. Find the 2019 IRMAA thresholds for single. Adjust those (except the last tier) upward by the increase. Round the numbers to the nearest $1,000. Double the numbers for Married Filing Jointly (again, except the last tier).
Vince says
So if you calculate the 9/17-8/18 average it’s 249.28 and the 9/19-8/20 average is 257.72 the difference is 8.44 which is 3.38% increase. $87,000 would increase 3.38% doesn’t seem right. It would be nice to see the proper calculation using this year’s numbers so we know what to expect next month when they release the written statement.
Harry Sit says
$87,000 is the first tier threshold for 2020. You need the numbers for 2019.
Vince says
So you would use the $85,000 from 2019 and multiply it by 3.38% which gives $2873. That means rounding up to $3000 and adding it to $85,000 gives $88,000 for 2021 not your figure of $87,000.
Carl says
Harry,
I got it now! Thank you very much for taking the time to explain this. It will make future years much easier to forecast and plan.
Vince says
Harry I’m sorry you had $88,000 for 2021. My fault.
Vince says
Does anyone know when the government will officially announce the lowest brackets will be $88,000/$176,000? And also, when they will announce what the 2021 medicare premiums will be? Last question, does anyone know if the brackets could ever go below $85,000/ $170,000 in the future with deflation?
Debbie says
I am relatively new to Medicare. I understand it to be a National Health care program for people over 65. Single or married should be the only two factors in determining the monthly fee. Apparently either the govt or Medicare decided that people over 65, who make over a certain salary must get sick more often, therefore, are being charged an addl fee called IRMAA. This is a disgrace. Someone’s salary should not even come into play when determining the cost for health care. Would love to know what medical Dr. made that decision (ha)!!! Basically the Medicare book should read that people making over a certain salary are required to help pay medicare costs for others since that is what is actually being done.
Grumpy says
IRMAA is assessed on your income tax filing. If you file married/ joint then the income threshold is 2X the single threshold. So if one spouse has 90K of income, and the other has 84K (or less) then neither hits the IRMAA; as on average each has an < = 87K income.
vince says
Looks like Medicare just announced the irmaa income brackets for 2021 and Harry Sit was exactly right $88,000/ $176,000. I’m still waiting to do Roth conversions and/or stock capital gains this year until I get more info on future irmaa bracket possibilities. Not sure if they can dip below $85,000/ $170,000. It would be nice to know that 2022 would be above the 2021 brackets $88,000/$176,000.
Very frustrating not knowing the figures until it’s too late to adjust income.
Vince says
One financial advisor said the 2022 brackets could vary from $168,000- $178,000 for joint filers. That’s a big difference and makes it hard to plan income this year (2020).
Harry, can you provide any input to this? Is $170,000 the floor and brackets can’t go lower?
Harry Sit says
Right now we only have one data point out of 12 to calculate the brackets for 2022. It’s way too early to have an accurate projection. If I must guess, the range for the first tier will be between $88,000/$176,000 (no change) and $90,000/$180,000, with the most likely scenario in the middle, i.e. $89,000/$178,000.
Eric says
Is it possible for the brackets to go down from one year to the next?
Harry Sit says
It’s possible to go down if we have bad enough deflation. If inflation is lower than -3%, the 2022 numbers will go down from the 2021 levels.
Songbill says
In reading about the COVID-related “hold harmless” provisions for new Medicare premiums for 2021, as enacted by Congress and signed by the President last month, my understanding is that premium annual adjustment is limited to 25% of what it otherwise would have been for 2021. However, I can’t find any articles that answer the question of whether this applies to all brackets, including the IRMMA ones, or just the basic premium tier. Anybody know?
Harry Sit says
The 2021 Medicare Part B premiums for different brackets are here:
https://www.medicare.gov/your-medicare-costs/part-b-costs
I suppose these published numbers already took the new law into account. In other words, the premiums would be higher otherwise. Because the premiums for higher tiers are a multiple of the standard premium, when the standard premium is lower, the premiums for the higher tiers are also lower proportionally.
Wizard says
This probably means that Medicare premiums for 2022 will be going up 75% more than normal.
Tighten your seatbelt a year from now…
Songbill says
@ Harry,
Yes, looks that is the case. Basic tier is rising 2.8% and IRMMA brackets are also at 2.8%. Before the “hold harmless” enactment last month, the increase was going to be $20 instead of $4 at the basic tier. That a 75% reduction to your rate increase for 2021.
Rick Craven says
Advise needed – In Sept. of 2018 I retired and started taking social security benefits. In 2019 I took out a large amount of money from my mutual funds that I had saved throughout my working career to put a down payment on a house to live in when I retired. Before that I was living with my sister. My taxes return for 2019 of course reflected an inflated amount of income which in turn flagged Social Security that I must pay The IRMAA Medicare B and IRMAA Medicare Drug costs (Approx. $270 additional charges being deducted out of my social security check each month). This additional amount will start being deducted in Jan. of 2021 for a full year. This has caused a large financial hardship on me that jeopardizes me from keeping my newly purchase home. My true income is really approx. $51500 gross per year. Wanted to know if I can have them waiver this IRMAA from being charged to me because of the one-time purchase of a home to live in? This seems so unfair and unethical of what the government are imposing on me. Thank you so much for your help in this matter.
The Wizard says
Sorry, you’re SOL on this one.
It would have been much better to have taken out a modest mortgage on the property instead…
Songbill says
If it’s any consolation, you are not alone. I think there are probably many retirees with modest incomes who get unexpectedly smacked by a huge IRMMA because they experience a one-time only large gain event. Sometimes the gain was built up over a period of a life time. I had never even heard of IRMMA. My wife and I live on income from Social Security and a modest monthly pension. Last year, a company in which we had owned stock for several decades was bought up by a large conglomerate. We bought shares years ago when the stock was very cheap and the firm then had great success. Unfortunately, the conglomerate paid out cash in a lump-sum rather than issuing equivalent shares in their firm. We had no say in the matter. Now we are faced with losing over $700 PER MONTH in Social Security next year. I don’t think Congress intended for modest income retirees to have a life time of saving get whacked by IRMMA….. but that is exactly what is happening to a number of us.
Harry Sit says
Think of it as part of the capital gains tax. $270/month for 12 months is $3,240. It’s 4% on say $80k worth of capital gains. If you borrowed extra $80k in your mortgage you would pay about that much interest in the first year. If you had to pay that $3,240 as part of your capital gains tax, maybe you would’ve been OK with it. You pay the tax after realizing gains from many years of investing. Framing it as an additional Medicare premium two years later just makes people mad.
Roger says
It can’t hurt to file with the SSA for an appeal. In the year (2018) we retired, our income put us in an IRMAA bracket (by getting paid for a lot of unused vacation time). We appealed and explained it was a one-time “bump” and our income was below the IRMAA limit without it. They agreed and refunded the IRMAA overage. This year, thanks to the elimination of the Required Minimum Distribution, we lowered our income to below the IRMAA limit. So, I guess we’re safe until 2022.
Katherine says
Hello, I had a higher income in 2019 because I sold a rental house. I reported on my 2019 income tax and I submitted to IRS before April 15, 2020 (even though the IRS extended deadline due to COVID). As of today, Nov 11, 2020, I haven’t received any notification of my IRMAA premium increase for 2021. I also looked on line at Social Security site and it did not have my 2019 income. Is IRS behind in reporting and processing? Can this IRMAA increase for 2019 income not be reflected until 2022 instead of 2021?
Harry Sit says
If you filed on paper, the IRS is backlogged. You can check the IRS Where’s My Refund site to see the latest status. Eventually, they’ll catch up and bill you. They won’t push it to 2022.
Katherine says
Hi Harry,
I did TurboTax and filed 2019 electronically. I did not have a refund coming. I did over estimate my 2019 taxes but ask that the overage be applied to 2020 not refunded. I still am not understanding why I haven’t received IRMAA notification because in TurboTax it says my return was accepted by the IRS just a day after it was filed back in April 2020.
I guess I don’t want any surprises and thought I would have been notified by now about the increase in the premium that will come out of my social security starting Jan 2021 for both part B and D.
I am like many people, I feel this is an injustice to the hard working people who have scrimped and tried to save….never had a vacation because could not afford it. Tried to take care of what money I made and prepare for the future. Never on the government dole and now penalized for trying to be responsible and take care of myself. Never made over $48k a year when working. Sorry for the soapbox but I am very unhappy with this unfair tax on seniors.
Harry Sit says
Even though you aren’t getting a refund, you can still use the “Where’s My Refund” tool to check on your tax return processing status. You can also use the IRS Get Transcript tool to confirm the return they received matches the one you filed. I filed in April and I have 2019 income in my Social Security earnings history already. Something went wrong if you don’t have yours.
The Wizard says
Perhaps don’t think of IRMAA as a tax on us, but rather, as a discount system for poor seniors.
Are you ok with giving low-income seniors scrimping by mostly on SS a discount?
I pay around $380/month for Part B and am ok with it…
Katherine says
Mr. Wizard, I would rather have the option to opt out of Medicare all together. I would like to be able to make my own decisions on how I handle my healthcare. Yes, I believe in helping those less fortunate but when I see the abuse and corruption of the system, it makes me sick. Clean it up and get those off the system that are exploiting it.
Ed says
“ I am like many people, I feel this is an injustice to the hard working people who have scrimped and tried to save….never had a vacation because could not afford it. Tried to take care of what money I made and prepare for the future. Never on the government dole and now penalized for trying to be responsible and take care of myself. Never made over $48k a year when working. Sorry for the soapbox but I am very unhappy with this unfair tax on seniors.”
I agree, both in what it is and especially the way it is implemented. $1 of income can trigger the entire penalty premium. What can be fair about a system with taxes over 100% of marginal income?
ed 2 says
Just looked at my 2021 benefit statement. It says IRMAA was based on 2018 income tax form, not 2019 as you suggest. Why?
Harry Sit says
Log in to your Social Security account and see if they have your 2019 income. Also see comment #88.
Ken says
I downloaded my 2021 report yesterday, after getting email from SSA that it was ready, and it said 2019 income and quoted the income figures from that 2019 tax return. I am paying IRMAA in 2021, as I had expected.
CathyKate says
I agree with Katherine and Ed. I too am not poor, but certainly not rich. I filed Married Separate one year because my husband and I are both retired teachers in Missouri and our state tax break is better if we file separately. I was shocked when I was just a bit over the $85,000 limit and found myself skipping all of the tiers down to the last tier that put me in the same category as people making over $400,000. The explanation is that a couple can manipulate their income between the two of them, but we didn’t try to do that. We both have a set retirement. So now we file joint but have to pay more in state income tax. I wish that “file separate” would have the same incremental tiers as the other brackets.
Katherine says
CathyKate, it is very disheartening. If I had known about IRMAA I would have sold my rental house prior to going onto social security. That rental property was for my retirement and I was really surprised about the Part D IRMAA. I am not on any medications (and very fortunate that I am healthy) but feel penalized that trying to maintain a healthy lifestyle, so now I have my notice from Social Security that they will be taking 51.20 for Part D besides the Part B increase. I know that there are comments that we are helping the less fortunate, but there are many ways to help without taking our hard earned money. The waste and fraud is infuriating. For 2021 I am going to have to watch everything I spend because of the decrease in my Social Security. Someone suggested that I file an appeal for the one-time bump in our income, but my letter from Social Security said if it is capital gains, there will not be any adjustment made. So my husband and my income will be reduced total of $577.60 a month.
The government is slowing trying to do away with the middle class…..
Bev Lolr says
I am trying to figure out a Roth conversion amount for 2020 tax return. How high in AGI can I go and stay in the second tier for 2022? Thank you!
Harry Sit says
It’s not possible to have an accurate projection for 2022 at this time. It’s safer to use the 2021 levels as estimates for 2022 (even that isn’t 100% safe in case we have large deflation).
Bev Lolr says
Does the government provide these tiers by the 2020 tax year end? Sure makes tax planning a gamble. What were the 2021 levels that may or may not be safe. Thank you so much for any guidance you may provide. I’m not the only one in this pickle barrel. Thank you
Harry Sit says
The government provided the 2021 numbers only in early November 2020. The numbers are in the table in this post, and also in the link in the first sentence. The official 2022 numbers will come in late October or early November 2021. I’ll have a good projection for 2022 by summer 2021.
Ken says
I posted this link a while back as comment #70. It shows the brackets for 2021 surcharges from 2019 income levels. https://thefinancebuff.com/medicare-irmaa-income-brackets.html
Ed says
Aren’t 2022 numbers in 2021 of no use since we are trying to budget for 2020?
Harry Sit says
If you must have the precise numbers for 2022 before the end of 2020, no one can provide them. I see comments from summer 2020 when I had the projection for 2021 numbers. They must have found the numbers of some use.
Ed says
Ultimately the only thing that can be said is this is absolutely ridiculous? Only a damn bureaucrat could come up with IRMAA and it implementation.
The Wizard says
It’s true that we don’t know for sure if IRMAA thresholds can decrease in years with deflation rather than inflation.
SS payments cannot, so that gives me a bit of hope.
Anyhow, in reply to Bev on figuring how much to Roth convert for this year, 2020, I’d recommend looking at the threshold amounts for next year, 2021, based on 2019 income.
2nd tier goes from $88,001 to $110,000 for 2021, so I would be comfortable Roth converting up to a MAGI of $108,000 this year, about $2000 less than the threshold.
This is basically what I’m doing for the tier I’m in…
RL says
My problem is that due to a one-time capital gain in 2018 we paid a large IRMAA this year…..Our income returned to normal and we filed a 2019 paper return in July, but since it’s still not processed and is missing from our transcript, the IRMAA is still based on the 2018 return….How hard will it be to appeal without the processed return?
The Wizard says
Very easy to appeal with SSA-44, just include a copy of both sides of your 2019 form 1040…
TwoGeezz says
Harry Sit:
In post 21 you state “The law only talks about “increase” and “exceed.” I assume it means if the change is negative they will just freeze in place until inflation catches up. ”
In post 61 (and subsequent posts) you state specifically that deflation can result in a reduction in the tier thresholds.
Did you come upon more recent information that indicates a reduction in the tiers with negative CPI?
Thanks for a great thread!
Harry Sit says
My interpretation of the wording in the law is that they can go down year to year but they can’t go below the 2019 IRMAA thresholds, from which all the increases are calculated. See comment #79. If there’s deflation, as long as the numbers are still higher than those in 2019, it’s still an increase from the base levels. Of course because we haven’t seen deflation no one knows how the government will do it when it really happens. Maybe they won’t let them go down year to year. I say prepare for the possibility the numbers will go down. If they don’t, be pleasantly surprised.
TwoGeezz says
Great explanation! Didn’t catch that baseline number.
bev lolr says
IRMAA is so confusing. Can you please tell me what the 2019 tier numbers are for me to safely use in calculating a Roth conversion to take now for tax year 2020. The deflation scare is real. I looked at #79 but still unsure. Thank you.
Harry Sit says
The 2019 numbers were:
Single: $85,000, $107,000, $133,500, $160,000, $500,000.
Married Filing Jointly: $170,000, $214,000, $267,000, $320,000, $750,000.
Ken says
Harry,
I think Bev is asking for advice on her current tax year 2020 with an eventual 2022 surcharge, and wants you to relist the recently announced (which you estimated in July and were correct as I recall in your post 79?) tax year 2019 and IRMAA surcharge levels for 2021 medicare year came out from Soc Sec, which are the newest real levels to go by when guessing what they will be for the year 2020 in advance. These figures you just quoted look like 2017 tax year and surcharge levels for 2019 medicare year. I thought level 1 surcharge peak (in 2021 for 2019 income) for MFJ category was $222K as one example, and not $214K. I could be wrong.
Harry Sit says
The 2021 numbers are already in the main body of this post. The very purpose of this post is to keep track of the numbers for next year. The 2021 numbers are probably good enough as a floor for 2022 but you never know how inflation or deflation plays out. The 2019 numbers are the baseline from which all future increases are calculated. If someone wants to be extra safe, use the 2019 numbers.
Ken says
https://www.medicare.gov/your-medicare-costs/part-b-costs
Bev says
Are these from the 2017 AGI numbers on income tax return s for the 2019 IRMAA subsidy, or, are these the 2019 AGI income tax numbers for 2021 IRMAA. Are you saying that the tiers are the same as 2017 used for 2019 IRMAA? That is my question. Thank you.
Ken says
Bev,
If you click on the link I posted above in #105, it lists the levels by year, noting the tax year and the related surcharge for Medicare year. Pick the one you want to review. I think it is the second table, with the green 2021 (surcharge year) for 2019 income tax returns.
bev says
Thank you so much Ken. I checked it out. Here is another relevant link but still confusing. https://www.investmentnews.com/medicare-irmaa-surcharges-to-be-adjusted-for-inflation-in-2020-81325
David JOEL says
You didn’t mention that IRMAA MAGI includes untaxed social security income. In our case that is over $6000 per year so one needs to be careful not to cross a IRMAA bracket because of that MAGI add-on
Eric says
What do you base that on? I don’t think that is accurate.
Harry Sit says
The MAGI for IRMAA does NOT include the untaxed Social Security benefits.
Ed says
I think the confusion comes from there being more than one MAGI. The Medicare one is different from the one used for the Affordable Care Act. ACA uses the untaxable SS income but Medicare does not. It would help help if when they are discussed it would be stated as “Medicare MAGI” or “ACA MAGI”.
Ken says
Thank you, Harry! That put a scare into me after making a year end withdrawal that took me up close to max of MFJ surcharge level 1. I used the same logic of what is said in this 2020 SSA doc last year to compute MAGI for 2019 tax year, when I also did year end withdrawal that took me close to the max on surcharge level 1 on my 2019 tax year return. This SSA website page restates method I used for MAGI calc for 2019 and 2020 tax years.
https://secure.ssa.gov/poms.nsf/lnx/0601101010
George says
if 2020magi would mean you be in a higher irmaa bracket for 2022 year because of a gambling one that put you just over the limit. but if taxes are filed really late for example in November, would medicare still use the 2019 return and if so, once the 2020 was filed (for example in december of 2021) would medicare still adjust for irmaa for 2022?
The Wizard says
Bobby!
Long time no see!
How’s chess going lately?
Good times with Boris or this new guy Magnus?
Let us know; we’re cheering for you as always!!!
Vince Pellettieri says
Glad for your comical response. My response would have been different but I made a New Year resolution to eliminate political statements.
Ed says
Bobby Fischer, please define “fair share”.
Seattle Sue says
Thank you for a terrific and informative column. I retired in 2019 and appealed
our IRMAA income for 2020 and again for 2021 due to the drop in income due to retirement. Both appeals went smoothly (the first was an in-office visit and second was by mail this past December) and were granted. The 2020 appeal was based on our declaration our income would be under the 2019 threshold of $170,000. Although I carefully controlled taxable income to fall under that level, I forgot a taxable state tax refund that raised it to just over $170,000. Although we can use an IRA contribution to lower our joint income below $170,000, I’m trying to figure out if the government will use 2020’s newer $174,000 threshold for confirming we really qualified? Or whether we still have to stay under 2019’s $170,000 threshold which was used for the appeal? Any thoughts on this? And again, thanks for a great column and further support of your readers.
Paul says
Does anyone know of some good IRMMA calculators that will allow me to include all income and assets that will cause an increase in Medicare cost; one that gives me a total estimate to say age 90?
The Wizard says
It depends partly on your present age.
I’ve just been using a spreadsheet, customized to my own situation, which projects my AGI year after year. I update my spreadsheet with actual numbers each January.
I expect to be in the middle of the IRMAA tiers forever…
The Wizard says
Wait. Watch out!
We could be dealing with a Republican here!
Gaey says
Folks stop acting like children. What nonsense on a finance thread. Just unsubscribed to this post because of all the bs. Both are right and wrong as both are corrupt parties that act like cults. And you just proved it
The Wizard says
Replying to Tanya, your 2018 withdrawal set your IRMAA tier for last year and your large 2019 withdrawal set it for this year.
So it’s quite possible you will revert to a lower IRMAA tier next January.
Be smart and learn how to play the system. Taking a mortgage and paying it off over four years might, I say MIGHT, have been a better idea…
Art says
I retired in the middle of 2019, but an accrued annual leave payout + partial pension meant my income didn’t drop significantly that year. The WEP (“windfall profit”) penalty kicked in when my pension started, so I also lost 56.5% of my social security in late 2019. Should I include both of these as 2019 “lifetime events” when submitting a request for recalculation of my IRMAA ? I believe the monetary recalculation should be based on my 2020 MAGI ( which is approx 20k less than 2018’s, and approx 13k less than 2019’s MAGI).
I started medicare B in Jan 2020 and paid the IRMAA based on my 2018 (working) income. Now, even tho my 2019 income is lower than 2018, it appears my 2021 IRMAA assessment has gone up by approx $600 … not sure why, as I’m still in the same tier. I was about to inquire about this discrepancy, but realized it may be moot since my 2020 income — the first to significantly reflect my retirement— is low enough to put me into the next lower tier. I think I need to ask them to base my 2021 IRMAA on my 2020 MAGI … but my “life events” took place in 2019 — even tho they didn’t significantly affect my IRMAA income until the following year. I’m confused about whether I should submit proof re retirement from the year prior to my filing for Medicare, or if I should submit 2020 info, since it was the first year my income dropped me to a lower tier. I also don’t know if the drop will affect 2021 IRMAA only, or if it will be retroactive to 2020 and generate a refund . My estimated 2021 income will be slightly lower than 2020’s, but not enough to move me to an even lower tier).
Hard to get SS on the phone, and I find the form confusing, so any pointers you can offer would be appreciated. I’d like to have info prior to speaking with SSA , so as to have a better idea as to whether they’re telling me the right thing.
Very helpful column, thanks!
Thomas Settefrati says
I’ve been retired for 8 years and my wife is still working. I spend all day at a local Casino to play slot machines with the “Free Play Cash Coupons” they send me, out of boredom. So, many times during the 2019 year I hit Jackpots of several thousand dollars but never left the Casino with the money. I always put it back in until it’s gone. An example is , if you win an average of a thousand dollars a day like I did, but played it all back in everyday and lost it, My IRMAA shot up to the $365,000 AGI bracket. After deducting my losses, which exceeded my winnings shown on the WIN/LOSS report you get at the end of the year from the Casino , my income was just social security, 18,000 a year. Now my MEDICARE costs are over $1,250.00 a month, not including an additional $400.00 a month for supplemental Insurance., (my wife gets penalized too ) which is much more than we have coming in. Tried to appeal it, SS / Medicare denied it. Never knew that playing Slot Machines would affect Medicare Premiums. They shouldn’t go by your AGI, they should look at your income AFTER DEDUCTIONS. I’m going to have to refinance my home just to pay Medicare B and D premiums.
The Wizard says
Wow, this is a neat one!
You’ll need to contact your Congressman and have them change the law on the definition of Medicare MAGI.
Or the definition of net gambling income. Should be a slam dunk, I think…