How does nontaxable Social Security affect MAGI calculations for Medicare Part B and Part D premiums?
Executive summary
Nontaxable (untaxed) Social Security benefits are generally not included in the MAGI that the Social Security Administration uses to decide whether you owe an IRMAA surcharge for Medicare Part B and Part D; IRMAA is based on your federal tax return’s MAGI (AGI plus tax‑exempt interest) from two years earlier (e.g., 2023 MAGI for 2025 IRMAA) [1] [2]. Several consumer and financial outlets reiterate that the MAGI relevant to IRMAA excludes untaxed Social Security, and the SSA uses the IRS‑reported MAGI from the most recent tax return it receives to set Part B/Part D surcharges [3] [4].
1. How the SSA calculates the MAGI that triggers IRMAA
For Medicare premium surcharges (IRMAA), the Social Security Administration looks at the Modified Adjusted Gross Income reported on your federal tax return from two years prior and applies a sliding scale of surcharges for Part B and Part D; the SSA generally uses the most recent tax return the IRS provides and will notify you if a higher premium applies [1] [3]. Published summaries of the 2025 rules emphasize that MAGI for IRMAA is AGI plus tax‑exempt interest — not the broader MAGI used by other federal programs — and that the thresholds for 2025 started at $106,000 (single) and $212,000 (joint) [5] [4].
2. Where “nontaxable Social Security” fits into that MAGI definition
Multiple sources note a critical distinction: the MAGI used to determine IRMAA is your AGI plus tax‑exempt interest; it does not add back untaxed Social Security benefits the way some other programs’ MAGI definitions do. Thefinancebuff explicitly states that conversations claiming “untaxed Social Security benefits are included in MAGI” refer to different MAGI definitions, not the IRMAA MAGI [2]. Northwestern Mutual and other explainers repeat that IRMAA’s MAGI is derived from your federal tax return (AGI + tax‑exempt interest) and is distinct from ACA or other MAGI definitions that might include untaxed Social Security [4].
3. Practical consequence: IRMAA won’t usually rise because of untaxed benefits
Because the IRMAA MAGI calculation starts with AGI (which already reflects taxable income) and adds only tax‑exempt interest, untaxed portions of Social Security are not typically added back into the IRMAA MAGI; therefore, purely nontaxable Social Security benefits should not by themselves push a taxpayer into a higher IRMAA bracket according to the MAGI definition cited by SSA‑focused guidance and financial commentators [2] [4]. Consumer guides and SSA forms describe that the SSA relies on IRS‑supplied MAGI data from tax returns to assign surcharges and gives beneficiaries an appeal path if circumstances change [1] [3].
4. Important caveat: taxable portion of Social Security and other income do matter
Available sources stress that portions of Social Security that are taxable (the part included in AGI) do count toward MAGI and therefore can trigger IRMAA. Plus, distributions from traditional IRAs, RMDs, wages, and other taxable income are included in AGI and therefore in IRMAA calculations; financial planners highlight Roth distributions as a commonly recommended strategy because qualified Roth withdrawals generally do not increase MAGI for IRMAA purposes [2] [6].
5. Timing, notices, and how to challenge or update the SSA’s use of your MAGI
The SSA determines IRMAA using tax returns from two years prior — e.g., 2023 returns for 2025 premiums — and typically notifies beneficiaries before higher premiums are charged; if your income falls because of a life‑changing event, you can request a redetermination and supply more recent tax information or documentation [1] [3]. SSA forms and fact sheets explain the process and the exceptions where the agency will use alternate tax years if the IRS didn’t provide the more recent return [3].
6. Conflicting definitions in public discussion — check the fine print
Many consumer pieces and advisory sites repeat the core point but also warn of confusion because “MAGI” means different things in different programs. Thefinancebuff and other explainers explicitly warn that statements saying “untaxed Social Security is included in MAGI” often refer to the ACA’s MAGI or other contexts — not IRMAA’s MAGI — so misreading those articles can create mistaken fear of higher Medicare premiums [2]. Always read the MAGI definition in SSA/CMS materials or ask a tax professional for the exact treatment that applies to IRMAA [1] [4].
Limitations and next steps: available sources do not provide an SSA‑issued plain‑English line that reads word‑for‑word “untaxed Social Security is excluded from IRMAA MAGI,” but multiple expert explainers and MAGI‑definition comparisons in the provided reporting lead to that practical conclusion [2] [4]. If you want a definitive, personalized determination, request your SSA notice, consult the SSA’s IRMAA form (SSA‑44) and the CMS fact sheet, or talk to a tax advisor with the exact numbers from your tax return [3] [7].