What is the two year rule for Irmaa?

Asked by: Pete Bahringer I  |  Last update: May 20, 2025
Score: 4.5/5 (46 votes)

The Social Security Administration (SSA) determines if you owe an IRMAA based on the income you reported on your IRS tax return two years prior, meaning two years before the year when you pay the IRMAA. For example, Social Security would use tax returns from 2024 to determine your IRMAA in 2026.

How many years does Irmaa last?

IRMAA is determined by income from your income tax returns two years prior. This means that for your 2024 Medicare premiums, your 2022 income tax return was used. And for your 2025 premiums, your 2023 tax return will be used. IRMAA applicability and amounts are recalculated annually.

What is the Medicare irmaa for 2024?

For 2024, if your income is greater than $103,000 and less than $397,000 the IRMAA amount is $384.30. If income is greater than or equal to $397,000 the IRMAA is $419.30. Medicare Part D. If your income is greater than $103,000 and less than $397,000, the IRMAA amount is $74.20.

What income level triggers Irmaa?

The first threshold is $103,000 if you're a single filer or married and filing separate. It's $206,000 if you're married and filing jointly. If your Modified Adjusted Gross Income was at that threshold or lower for 2022, your monthly Medicare Part B premium will be $174.70 per month for 2024.

How do you get around Irmaa?

How to Avoid IRMAA: 9 (Simple) Ways to Reduce Medicare Costs
  1. 1.) Charitable Giving.
  2. 2.) Tax Deductible Retirement Account Contributions.
  3. 3.) Tax-Free Retirement Income.
  4. 4.) Tax-Efficient Investments.
  5. 5.) Tax-Efficient Withdrawal Strategies.
  6. 6.) Medicare Savings Accounts (MSAs)
  7. 7.) Roth Conversions.
  8. 8.) Tax Gain Harvesting.

How to Avoid IRMAA the Right Way! | Medicare IRMAA Calculation Explained

21 related questions found

Does everyone have to pay $170 a month for Medicare?

Most people pay no premiums for Part A. For Medicare Part B in 2025, most beneficiaries will pay $185 per month. Certain factors may require you to pay more or less than the standard Medicare Part B premium in 2025.

Does Irmaa apply to both spouses?

But Medicare's IRMAA brackets are what's known as a “cliff” – if you make one dollar over the bracket threshold, you and your spouse (if you are married filing jointly and are both enrolled in Medicare) will pay that bracket's IRMAA amount.

What income is used to determine Medicare premiums 2024?

Medicare premiums are calculated using your Modified Adjusted Gross Income (MAGI) from your tax return for two years prior to the current year. For example, if you're paying premiums in 2024, these will be based on your 2022 MAGI.

Do you have to apply for Irmaa every year?

IRMAA is calculated every year. That means if your income is higher or lower year after year, your IRMAA status can change. If the SSA determines you must pay an IRMAA, you'll receive a notice with the new premium amount and the reason for their determination.

Can I get an Irmaa refund?

Can you get a refund on Irmaa Medicare? Yes, if you've paid more than the standard Medicare Part B premium, an IRMAA refund can be applied for.

Does rental income count towards Irmaa?

Key Points. IRMAA is an extra charge for individuals with higher incomes and can impact your Medicare Part B and Part D premiums. IRMAA is based on your MAGI, which includes various income sources such as taxable Social Security benefits, retirement distributions, rental income, and more.

Does Medicare check magi every year?

Your MAGI is the total of your adjusted gross income and tax-exempt interest income. Each fall, when we ask the IRS for information to determine next year's premiums, we ask for tax information to verify your reports of changes affecting your income-related monthly adjustment amounts, if any.

How do I get Irmaa reduced?

Fax or mail your request. Fill out the Medicare Income-Related Monthly Adjustment Amount-Life-changing Event (SSA-44) (PDF) form. Fax or mail your completed form and evidence to a Social Security office.

What are the changes coming to Medicare in 2025?

The standard monthly premium for Medicare Part B enrollees will be $185.00 for 2025, an increase of $10.30 from $174.70 in 2024. The annual deductible for all Medicare Part B beneficiaries will be $257 in 2025, an increase of $17 from the annual deductible of $240 in 2024.

How is Irmaa calculated for 2026?

However, your IRMAA premium each year is based on your income from two years prior. So your IRMAA (if any) for 2024 is based on your income from 2022. As a result, the government will use your 2024 income to calculate your IRMAA adjustment in 2026.

Does Social Security count as income for Irmaa?

This is a common question, and one that is answered incorrectly on several prominent websites. The calculation for IRMAA MAGI (Modified Adjusted Gross Income) includes just the taxable portion of Social Security.

What will the Irmaa be for 2025?

For 2025, if your income is greater than $106,000 and less than $394,000 the IRMAA amount is $406.90. If income is greater than or equal to $394,000 the IRMAA is $443.90. Medicare Part D. If your income is greater than $106,000 and less than $394,000, the IRMAA amount is $78.60.

Does inheritance count toward Irmaa?

Receiving a Windfall: Inheritance, large bonuses, or other windfalls can suddenly spike your income and lead to higher IRMAA charges. Annuity Distributions: Taking distributions from an annuity can also impact your MAGI, affecting your IRMAA in the process.

Will I get separate bill for Irmaa?

When you first start Medicare, your IRMAA charge will be billed separately from your first Medicare Part B bill. While it can be confusing, it's important that you pay both invoices. If you don't, your Part B and/or Part D insurance will get canceled.

What income level triggers higher Medicare premiums?

If you file your taxes as "married, filing jointly" and your MAGI is greater than $212,000, you'll pay higher premiums for your Part B and Medicare prescription drug coverage. If you file your taxes using a different status, and your MAGI is greater than $106,000, you'll pay higher premiums.

How much money can you have in the bank if you're on Medicare?

eligibility for Medi-Cal. For new Medi-Cal applications only, current asset limits are $130,000 for one person and $65,000 for each additional household member, up to 10. Starting on January 1, 2024, Medi-Cal applications will no longer ask for asset information.

How do I get $144 added back to my social security check?

How do you get $144 added back to your Social Security check every month? If you enroll in a Medicare Advantage plan with a Part B giveback benefit, the plan reduces the amount deducted from your Social Security check for Medicare Part B, which could add up to $144 back to your check each month.

Why is Social Security no longer paying Medicare Part B?

There could be several reasons why Social Security stopped withholding your Medicare Part B premium. One common reason is that your income has exceeded the threshold for premium assistance. Another reason could be that there was a mistake or error in your records.