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What is "IRMAA" in Tax Clarity?

Income-Related Monthly Adjustment Amount

The Income-Related Monthly Adjustment Amount is a monthly surcharge to Part B and Part D Medicare premiums based on Modified Adjusted Gross Income (MAGI). The ultimate surcharge is based on income from MAGI levels from two-years prior, thus the surcharge for 2021 will ultimately be based on 2019 income levels.   Without going into detail, one might consider controlling MAGI two years prior to enrolling in Medicare to account for any potential IRMAA impact.  

Below is a chart outlining Part B premiums and the IRMAA adjustments.  

Note that IRMAA levels have been frozen through 2019 due to the Affordable Care Act, and in fact, the highest two levels will continue to be frozen through 2028 short of any statute changes.  

Within Tax Clarity, notification of a potential IRMAA impact is shown on the Tax Map with spikes to 100%, indicating the client may want to investigate further with Medicare.gov.  Again, IRMAA is not a tax per se, it is a surcharge applied to Medicare Part B and Part D premiums.     

  

If your yearly income in 2019 (for what you pay in 2021) was 

You pay each month (in 2021) 

File individual tax return 

File joint tax return 

File married & separate tax return 

$88,000 or less 

$176,000 or less 

$88,000 or less 

$148.50

above $88,000 up to $111,000 

above $176,000 up to $222,000 

Not applicable 

$207.90

above $111,000 up to $138,000 

above $222,000 up to $276,000 

Not applicable 

$297.00 

above $138,000 up to $165,000 

above $276,000 up to $330,000 

Not applicable 

$386.10 

above $165,000 and less than $500,000 

above $330,000 and less than $750,000 

above $88,000 and less than $412,000 

$475.20 

$500,000 or above 

$750,000 and above 

$412,000 and above 

$504.90