This post about IRMAA Brackets for 2023. As we approach the end of another year, it’s essential for Medicare beneficiaries to understand the income-related monthly adjustment amount (IRMAA) and its impact on Medicare premiums. IRMAA is an additional fee that certain high-income individuals and couples must pay on top of their regular Medicare Part B and Part D premiums.
In this post, we’ll delve into what IRMAA is, the income brackets for 2023, how the premiums are calculated, strategies for managing IRMAA, and more.
Table of Contents:
- What Are IRMAA Brackets?
- IRMAA Brackets for 2023
- How to Calculate IRMAA Premiums
- Strategies for Managing IRMAA
- How to appeal the IRMAA
- IRMAA Brackets FAQs
What Are IRMAA Brackets?
IRMAA, or the income-related monthly adjustment amount, is a surcharge that applies to Medicare beneficiaries with higher incomes.
If your income exceeds certain thresholds, you’ll be subject to additional monthly premiums on your Medicare Part B and Part D coverage.
This surcharge is calculated based on a sliding scale, and it’s intended to help support the financial stability of the Medicare program.
IRMAA Brackets for 2023 – Summary
The IRMAA income brackets for 2023 determine whether you’ll be subject to the additional surcharge and how much you’ll have to pay.
The following are the income thresholds that apply for the 2023 tax year:
- Part B IRMAA Brackets:
- Individuals with a 2021 income of $97,000 or less (or married couples filing jointly with an income of $194,000 or less) will pay the standard Part B premium of $164.90.
- The Part B IRMAA surcharges range from $65.90 to $560.50 per month, depending on income and filing status.
- Part D IRMAA Brackets:
- Individuals and couples who earn $87,000 or less (or $174,000 or less for joint filers) will pay their standard Part D plan premium.
- The Part D IRMAA surcharges range from $12.20 to $76.40 per month, in addition to the standard plan premium.
These income thresholds determine the bracket you fall into and the corresponding IRMAA surcharge you’ll be required to pay.
IRMAA Brackets for 2023 – Details
Here are the Social Security IRMAA Tables for 2023 based on your tax filing status:
Single, head–of–household, or qualifying widow(er) with dependent child tax filing status
|
If MAGI in 2021 (or 2020 if 2021 is not available) was: |
Then the Part B Premium* is: |
Prescription Drug Coverage Premium** is: |
|---|---|---|
|
More than $97,000 but less than or equal to $123,000 |
$230.80 |
$12.20 + Plan premium |
|
More than $123,000 but less than or equal to $153,000 |
$329.70 |
$31.50 + Plan premium |
|
More than $153,000 but less than or equal to $183,000 |
$428.60 |
$50.70 + Plan premium |
|
More than $183,000 but less than $500,000 Greater than or equal to $500,000 |
$527.50 $560.50
|
$70.00 + Plan premium $76.40 + Plan Premium |
Married filing jointly tax filing status
|
If MAGI in 2021 (or 2020 if 2021 is not available) was: |
Then the Part B Premium* is: |
Prescription Drug Coverage Premium** is: |
|---|---|---|
|
More than $194,000 but less than or equal to $246,000 |
$230.80 |
$12.20 + Plan premium |
|
More than $246,000 but less than or equal to $306,000 |
$329.70 |
$31.50 + Plan premium |
|
More than $306,000 but less than or equal to $366,000 |
$428.60 |
$50.70 + Plan premium |
|
More than $366,000 but less than $750,000 Greater than or equal to $750,000 |
$527.50 $560.50 |
$70.00 + Plan premium $76.40 + Plan Premium |
Married filing separately tax filing status
|
If MAGI in 2021 (or 2020 if 2021 is not available) was: |
Then the Part B Premium* is: |
Prescription Drug Coverage Premium** is: |
|---|---|---|
|
More than $97,000 but less than $403,000 Greater than or equal to $403,000 |
$527.50 $560.50 |
$ 70.00 + Plan premium $76.40 + Plan Premium |
For the 2024 thresholds, see our post on the 2024 IRMAA Backets.
How to Calculate IRMAA Premiums
The IRMAA premium calculation is based on your modified adjusted gross income (MAGI) from two years prior.
MAGI is not the same as your regular adjusted gross income (AGI); it includes additional sources of income like tax-exempt interest and certain foreign income.
The higher your MAGI falls within the income brackets, the higher your IRMAA surcharge will be.
Medicare Part B and Part D IRMAA surcharges are added on top of your standard premiums, which can significantly impact your overall Medicare costs.
For example, if you have a 2021 income of $200,000 as an individual, you’d fall into the highest Part B IRMAA bracket and pay an extra $395.60 per month, totaling $560.50 including the standard Part B premium.
Strategies for Managing IRMAA
There are strategies you can consider to manage or minimize your IRMAA surcharges:
- Tax Planning: Work with a tax professional to explore ways to reduce your MAGI through strategies like tax-efficient investments, deductions, and contributions to tax-advantaged retirement accounts.
- Roth Conversions: If you’re eligible, consider converting traditional retirement accounts to Roth accounts. While this may result in a tax bill now, it can help reduce your future MAGI and IRMAA.
- Charitable Contributions: Some charitable contributions can lower your taxable income and subsequently your MAGI. However, not all contributions will affect your MAGI.
- Qualified Charitable Distributions (QCDs): If you’re 70½ or older, QCDs allow you to donate your required minimum distributions (RMDs) directly to qualified nonprofits, reducing your MAGI.
How to appeal the IRMAA
If you believe that your IRMAA determination is incorrect due to errors in your tax return or significant life changes, you have the right to appeal.
You can contact the Social Security Administration to request a reconsideration of your IRMAA status.
Some qualifying events for appeals include marriage, divorce, work stoppage, loss of income, and more.
IRMAA Brackets FAQs
Here are the most frequently asked questions about IRMAA Brackets for 2023:
What is IRMAA?
IRMAA stands for income-related monthly adjustment amount.
It’s an additional fee applied to Medicare Part B and Part D premiums for high-income beneficiaries.
How are IRMAA premiums calculated?
IRMAA premiums are based on your modified adjusted gross income (MAGI) from two years prior.
The higher your MAGI falls within the income brackets, the higher your IRMAA surcharge will be.
Can I avoid paying IRMAA?
You can reduce your IRMAA by implementing tax planning strategies, considering Roth conversions, making charitable contributions, and exploring qualified charitable distributions (QCDs).
How can I appeal my IRMAA determination?
If you believe your IRMAA determination is incorrect due to errors or significant life changes, you can appeal by contacting the Social Security Administration and requesting a reconsideration.
IRMAA Brackets for 2023 Summary
We hope this post on IRMAA Brackets for 2023 was helpful.
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Finally, be sure to check out our other articles about Social Security and Disability Benefits, including:
