How is IRMAA calculated and which income types count for 2025 Medicare surcharges?

1. How IRMAA is set: the two‑year lookback and sliding scale

Medicare determines IRMAA annually using the most recent federal tax return the IRS provides — which for 2025 is generally your 2023 return — and applies a sliding‑scale surcharge to Part B and Part D premiums based on that modified adjusted gross income (MAGI) ^[2][1]. CMS states the agency issues the Part B premium and the Part D IRMAA amounts each year; the Social Security Administration uses IRS data to place beneficiaries into income brackets and add the surcharge on top of the base premium ^[1][2].

2. What “MAGI” means for IRMAA and which income items are counted

Across the reporting, MAGI for IRMAA is your adjusted gross income (AGI) from the tax return with certain items added back — notably tax‑exempt interest and some other exclusions that the SSA/IRS treat as MAGI — so IRMAA reflects a Medicare‑specific MAGI rather than only taxable income ^[4][2]. Sources explain MAGI is AGI plus items like tax‑exempt interest and certain excluded foreign income; exact line‑by‑line treatments are those on your federal return as used by SSA from IRS records ^[4][2].

3. 2025 thresholds and where many beneficiaries land

The threshold to begin paying IRMAA in 2025 is $106,000 for single filers and $212,000 for married joint filers; beneficiaries above those levels pay additional monthly amounts on top of the 2025 standard Part B premium of $185 ^[3][1]. CMS and multiple financial outlets note IRMAA affects a minority of Medicare enrollees (roughly 7–8% historically for Part B), but the numbers paying surcharges have grown since IRMAA’s introduction and are tracked in Medicare reports ^[1][5].

4. Practical effects: timing, surprises and appeals

Because IRMAA is based on income two years earlier, retirees can be surprised: a high‑income year in 2023 still raises 2025 premiums. The Social Security Administration allows appeals if your income has dropped due to a “life‑changing event” (for example, retirement, marriage/divorce, death of a spouse) and you can submit Form SSA‑44 or evidence to request a redetermination; SSA will otherwise use the IRS information it receives ^[6][2].

5. Planning options and contested points in reporting

Advisers and outlets recommend tax‑year planning—timing Roth conversions, charitable giving, or retirement account distributions—to manage future MAGI exposure and avoid pushing into a higher IRMAA bracket; multiple financial publications present these strategies as ways to lower the MAGI used for IRMAA ^[7][8]. Sources differ in emphasis: government documentation (SSA/CMS) focuses on the mechanics and appeals process ^[2][1], while private advisers emphasize tactical tax moves and calculators to estimate the surcharge ^[4][9].

6. What the sources do — and do not — say (limitations and gaps)

Official sources specify the two‑year lookback, MAGI concept, sliding scale and appeals, and give the 2025 Part B premium; private outlets provide calculators, planning tactics and bracket tables consistent with CMS/SSA reporting ^[2][1][4]. Available sources do not mention comprehensive line‑by‑line IRS instructions for computing MAGI for IRMAA in this packet of reporting, so consult SSA/CMS or your tax advisor for exact add‑backs if you need them (not found in current reporting).

7. Bottom line for readers approaching Medicare

If your 2023 MAGI exceeded $106,000 (single) or $212,000 (joint), expect higher monthly Part B and Part D charges in 2025 and verify the amount Social Security reports; if your income changed since 2023, use SSA’s redetermination process and Form SSA‑44 to challenge IRMAA ^[3][6][2]. For specifics on the surcharge amounts and to model scenarios, use SSA/CMS materials and reputable IRMAA calculators cited by financial outlets ^[1][4].