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The IRMAA cost is calculated every year based on your taxable income from two years prior. Includes Capital Gains and tax exempt income.
So if your income drops, your IRMAA deduction will also drop.
If you income drops in 2025 vs 2024, you can file an appeal and ask them to recalculate IRMAA for 2026, based on 2025 income, not 2024 income, as soon as you file your 1040 for 2025.
There is a form to use and it is rather simple, but you have to have filed last years taxes first. I can find the form if you cannot
I did it a couple of years ago and it saved me 6 months of that increase.
@sma3- Thank you for your response. Our income is derived from three sources: SS, pensions, and investment income, which at this time is from fixed income and MMKT funds. The SS income will "only" drop less than $5k (due to IRMAA), the pensions have COLAs which likely will offset the IRMAA reduction, and the investment income will gradually taper down as interest rates drop.
So it will be a while before the retirement income will drop far enough to justify the appeal process. But that's definitely a very good thing to keep a close watch on, and I thank you very much for that information.
Comments
The IRMAA cost is calculated every year based on your taxable income from two years prior. Includes Capital Gains and tax exempt income.
So if your income drops, your IRMAA deduction will also drop.
If you income drops in 2025 vs 2024, you can file an appeal and ask them to recalculate IRMAA for 2026, based on 2025 income, not 2024 income, as soon as you file your 1040 for 2025.
There is a form to use and it is rather simple, but you have to have filed last years taxes first. I can find the form if you cannot
I did it a couple of years ago and it saved me 6 months of that increase.
So it will be a while before the retirement income will drop far enough to justify the appeal process. But that's definitely a very good thing to keep a close watch on, and I thank you very much for that information.
OJ