IRMAA Medicare Surcharges

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Medicare Part B and D have something called the IRMAA Medicare surcharges. When retirement planning, it’s crucial to consider the impact that the additional costs will have when trying to secure your retirement.

Medicare kicks in at 65, and there are premiums and surcharges that you need to know about.

What is IRMMA?

Income-related monthly adjustment amount (IRMAA) is an essential part of your Medicare because it’s a sliding scale percentage, which you’ll be required to pay based on your income. Depending on your income, you may or may not have this additional surcharge.

IRMAA is on top of the Medicare premiums that you pay, so it’s something to consider.

Note: We also have a flow chart, which will show you how much you’ll be required to pay for IRMAA based on your income. Call our office at (919) 787-8866 and ask Laura or Morgan for the chart.

IRMAA Medicare Surcharges FAQs

What is modified adjusted gross income?

Modified adjusted gross income is your income minus deductions and then added back items, such as your student loan interest or retirement account contributions. You’ll find this value on your tax form.

Did your modified adjusted gross income surpass $91,000 filing single or $182,000 filing jointly in the previous two years?

  • If you answer “no,” your premium for Part B will be $170.10 per month.
  • If you answer “yes,” your surcharges will be on a sliding scale, but there are a lot of additional questions to be asked.

You Answered, “Yes.” Now What?

If you answer “yes,” then the following questions will be asked:

  • Have you or a spouse experienced a life-changing event that significantly impacts your income? This includes marriage, divorce, widowing, retirement, loss of pension or income-producing property. If you answered “yes,” this will mean that you’ll submit a form to the IRS office to show that this income is no longer accurate. You’ll need to file form SSA 44, which shows your income has dramatically changed, putting you back to the previous premium.
  • No life-changing events but your modified adjusted gross income exceeds the figures above. Now, we’ll look at your tax return two years ago to find your modified adjusted gross income. Depending on this figure, you will pay:
    • $91,000 – $114,000 (single); $182,000 – $228,000 (married filing jointly): Additional surcharge is $68 per month for Medicare Part B and $12.40 per month for Part D.
    • $114,000 – $142,000 (single); $228,000 – $284,000 (married filing jointly): Additional surcharge is $170.10 per month for Medicare Part B and $32.10 per month for Part D.
    • $142,000 – $170,000 (single); $284,000 – $340,000 (married filing jointly): Additional surcharge is $272.20 per month for Medicare Part B and $51.70 per month for Part D.
    • $500,000+ (single); $750,000 (married filing jointly): Additional surcharge is $408.20 per month for Medicare Part B and $77.90 per month for Part D.

IRMAA is per person, so if you’re married and filing jointly, you’ll need to pay these additional surcharges for each person in the household on Medicare.

Strategizing for your Medicare is a smart decision because there are ways to reduce income to help save on these premiums.

Note: This will look back two years, so for 2023, your 2021 modified adjusted gross income will change.

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