1. What is IRMAA?

IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge added to Medicare Part B and Part D premiums for higher-income beneficiaries. It's calculated based on your Modified Adjusted Gross Income (MAGI) from two years prior.

2. How is IRMAA Calculated?

IRMAA uses a tiered system based on MAGI thresholds:

The Social Security Administration uses your MAGI to determine which IRMAA tier you fall into, with higher incomes paying higher surcharges.

3. MAGI vs AGI

Key Difference: While AGI is your gross income minus certain deductions, MAGI adds back certain items like tax-exempt interest and other specific additions. IRMAA is always based on MAGI, not just AGI.

4. Using the Calculator

Instructions: Enter your AGI from line 11 of your Form 1040, any tax-exempt interest (line 2a of Form 1040), and other MAGI additions. Select your filing status to calculate your estimated IRMAA.

5. Frequently Asked Questions (FAQ)

Q1: Is IRMAA based on AGI or MAGI?
A: IRMAA is based on MAGI (Modified Adjusted Gross Income), which is your AGI plus certain additions like tax-exempt interest.

Q2: What year's income is used for IRMAA?
A: IRMAA is based on your income from two years prior (e.g., 2023 IRMAA is based on 2021 tax return).

Q3: Can I appeal my IRMAA determination?
A: Yes, if you've had a life-changing event that reduced your income (retirement, marriage, etc.), you can file an appeal with Social Security.

Q4: What counts as "other additions" to MAGI?
A: This can include non-taxable Social Security benefits, foreign earned income exclusion, and other less common items.

Q5: How often is IRMAA recalculated?
A: Annually, based on your most recent available tax return (always two years prior).