IRMAA

IRMAA (Income Related Monthly Adjustment Amount) is an additional Medicare premium charged to higher-income taxpayers. IRMAA only applies if you are on (or will be on) Medicare. Catalyst has an option to include IRMAA in your projection.

Understanding IRMAA

IRMAA is calculated by Medicare using a 2 year look-back. If your income, from your tax return 2 years in the past, reaches certain thresholds, Medicare will charge you a monthly adjustment to your Part B and Part D premiums.

From a tax projection viewpoint, IRMAA is an estimate. Medicare does not release the income thresholds until the end of that 2 year look back, so we do not have accurate information to compute your adjustments.

The values reported by Catalyst are estimates using the most recently known data and the exact dollar values and tiers are generated solely as informational warnings.

Example

• In July of 2026, you run a 2026 tax projection as a Single filer, expecting a MAGI of $110,000.
• For the calendar year 2028, Medicare will use your 2026 income to determine any adjustments to your premiums.
• However, Medicare does not publish the final tiers (both the premium costs and the tier cutoffs) until ~October of 2027.
• Therefore, Catalyst uses the latest available estimates - which are the IRMAA tiers that apply in 2026, looking back at your 2024 income.
• In this example, the filer falls into the first IRMAA tier and Catalyst produces a warning that you may fall into Tier 1.
• However, these values are typically inflation adjusted and the cutoff for Tier 1 is $109,000 at the time of this example. It is very likely that when the actual IRMAA data is published in late 2027, that this filer will not actually fall into any IRMAA tier.
• These warnings are presented for informational purposes and to help guide your future tax planning.

NOTE: Catalyst updates these values each year, so if you go back a tax year or two and re-run a new projection, it will have updated IRMAA values.

For more information on IRMAA, see ssa.gov.