Who pays IRMAA
Only people with higher incomes. If your modified adjusted gross income (your adjusted gross income plus tax-exempt interest) is at or below the first limit for your tax filing status, you pay the standard premium and no IRMAA. Above that limit, the extra charge starts and grows in steps as income rises.
- It applies to Part B (medical) and, separately, to Part D (drug coverage).
- It is figured on each person, based on how you file your taxes (single, joint or separate).
- Most people never pay it.
Which income year counts
Social Security uses the most recent tax return the IRS has given it, which is usually from two years earlier. That means income in the year you were 63 can raise your premium at 65. If that return is not available, Social Security uses an older one.
- A big one-time sale, a large retirement-account withdrawal or a large capital gain can push one year over a limit.
- The steps are cliffs: being $1 over a limit puts you in the higher step.
Where the money goes
You do not pay IRMAA to your Medicare Advantage or drug plan. The Part B amount comes out of your Social Security check (or is billed to you if you do not get one). The Part D amount is paid to the government as well. Choosing a different plan does not lower IRMAA, because it depends on your income, not on the plan.
What you can do about it
If your income has dropped because of a life-changing event, you can ask Social Security to use a more recent income estimate. The steps are in our guide on how to appeal or lower your IRMAA. This page is general education, not tax advice. A tax professional can tell you how your own income is treated.