Medicare Premium Surcharge

[RioB840801]

I pay a surcharge on my Medicare premiums because of "higher income". That is due entirely to the RMDs I am required to take from my 401K & IRA. But we aren't required to take those this year (2020). But they use the AGI from your 1040 2 years previous. So if I understand it correctly I won't see the decrease on my premium until 2022. Is that correct?

Thanks.

[somarco]

@RioB840801 consider filing an appeal. Can't hurt. They can grant your appeal or deny it.

I have clients who have been granted a reduction in the IRMAA surcharge . . . some even had it waived completely.

You have nothing to lose by appealing.

https://www.ssa.gov/forms/ssa-44-ext.pdf

[GailL1]

@somarco 

Hey, will you check to make sure that I replied to this person correctly on applying for Part B coverage:

https://community.aarp.org/t5/Social-Security/Part-B-reapply-question/td-p/2285899 

It is under the SS board - sorry to handle this request to you this way but I have turned off my PM on this board so I have no access to PM at all.

TIA

[GailL1]

@somarco 

RioB840801 is talking about WHEN we will get a reprieve from IRMAA premiums, if any,  from NOT doing a RMD for 2020 - just because of how income (MAGI) is reported on our taxes, there is a (2) year lookback by SSA to assess the IRMAA premiums. 

So if you don't elect to take the RMD for 2020 as offered by the CARES ACT - that decrease in income isn't reported until 04/15/2021 (tax deadline).  Then SSA adjust it the following year or 2022.

I haven't heard of any changes to this procedure although by then Medicare will need money and those IRMAA's, frozen thru 2019 by the ACA, will now be going up most likely.

Yes, depending upon the reason, SSA can make modification to one's IRMAA premiums - just make sure it is a real hard-luck story !

Medicare Annual Verification Notices: Frequently Asked Questions 

Why did I receive another letter about my income-related monthly adjustment amounts for Medicare premiums for this year?

You received another letter from Social Security because your income-related monthly adjustment amounts for this year changed.  Social Security usually uses two-year-old data that the Internal Revenue Service (IRS) provides to us to determine your income-related monthly adjustment amounts.

[somarco]

@GailL1 I understood the question by the OP about RMD and IRMAA.

Applying for relief under CARES only gives a temporary IRMAA reprieve in the form of a deferral.

My suggestion is to appeal the IRMAA if the RMD was the only reason the tax was applied. If income without RMD is still above the threshold the appeal might still work in a partial reduction.

It can't hurt to appeal.

Or they can go the CARES route and get a deferral.

[PamK349759]

What form would you use to appeal and ask for redetermination due to RMD putting you over the threshhold or for one time capital gains that were reinvested and no money actually received in hand.  I know SSA-44 isn't used for that.

[GailL1]

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@PamK349759 wrote:

What form would you use to appeal and ask for redetermination due to RMD putting you over the threshhold or for one time capital gains that were reinvested and no money actually received in hand.  I know SSA-44 isn't used for that.

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Why would you think that an RMD would be exempt from the IRMAA?  A RMD or any distribution from one deferred retirement account is only deferred earnings - when you have to start taking the RMD - the "distribution" is considered income to you in the year you take it.  

The Medicare IRMAA calculation is computed by the SSA based on the amount of income (all of it) reported on the tax return from 2-years prior - or the most recent one that they have access to from the IRS.

If you took the money from a deferred retirement account - and it did NOT go back into a deferred retirement account via IRS rules for a rollover or transfer but instead went to some outside investment - it still counts as income.

Your post is confusing - maybe reword what happened if I am interpreting incorrectly.

[GailL1]

I understand it just like you - any reduction will not show up until 2022 because of the 2-year delay in Medicare (Social Security Admin.)looking at ones income tax return.

By 2022, will it be a decrease or will they just make up for lost time ????

2019 was the last year that the rates were held down by the ACA -

Really hard to read the future at the present time.