Medicare Part B premiums are automatically deducted from Social Security, Railroad Retirement Board, and Office of Personnel Management payments. The standard Medicare Part B premium is adjusted based on a taxpayer’s Modified Adjusted Gross Income (MAGI). MAGI for Medicare purposes is the taxpayer’s AGI plus any tax-exempt interest. Medicare uses a taxpayer’s MAGI from two years prior to determine any premium adjustment. For example, the MAGI from the 2021 tax return will determine 2023 Medicare premiums.
The standard Part B premium amount in 2023 is $164.90. Based on a taxpayer’s Modified Adjusted Gross Income, they may be required to pay an Income Related Monthly Adjustment Amount (IRMAA) on their Part B premium. MAGI thresholds and the associated Part B IRMAA is shown in the table below for each tax filing status:
|
If your yearly income in 2021 (for what you pay in 2023) was |
You pay each month (in 2023) |
||
|---|---|---|---|
|
File individual tax return |
File joint tax return |
File married & separate tax return |
|
|
$97,000 or less |
$194,000 or less |
$97,000 or less |
$164.90 |
|
above $97,000 up to $123,000 |
above $194,000 up to $246,000 |
Not applicable |
$230.80 |
|
above $123,000 up to $153,000 |
above $246,000 up to $306,000 |
Not applicable |
$329.70 |
|
above $153,000 up to $183,000 |
above $306,000 up to $366,000 |
Not applicable |
$428.60 |
|
above $183,000 and less than $500,000 |
above $366,000 and less than $750,000 |
above $97,000 and less than $403,000 |
$527.50 |
|
$500,000 or above |
$750,000 or above |
$403,000 or above |
$560.50 |
(https://www.medicare.gov/your-medicare-costs/part-b-costs)
At open enrollment, Medicare participants have the option to enroll in Part D prescription drug plans. Part D premiums are in addition to Medicare Part B supplement premiums and they vary per plan. Taxpayers with a higher MAGI will be required to pay a Medicare Part D surcharge in addition to their plan’s premium. Similarly to Part B premiums, the surcharge will be deducted from Social Security benefits if the participant is receiving them: otherwise, the individual will receive a bill for the monthly surcharge amount. The Part D IRMAA for 2023 is shown in the table below:
|
If your filing status and yearly income in 2021 was |
|||
|---|---|---|---|
|
File individual tax return |
File joint tax return |
File married & separate tax return |
You pay each month (in 2023) |
|
$97,000 or less |
$194,000 or less |
$97,000 or less |
your plan premium |
|
above $97,000 up to $123,000 |
above $194,000 up to $246,000 |
not applicable |
$12.20 + your plan premium |
|
above $123,000 up to $153,000 |
above $246,000 up to $306,000 |
not applicable |
$31.50 + your plan premium |
|
above $153,000 up to $183,000 |
above $306,000 up to $366,000 |
not applicable |
$50.70 + your plan premium |
|
above $183,000 and less than$500,000 |
above $336,000 and less than $750,000 |
above $97,000 and less than $403,000 |
$70.00 + your plan premium |
|
$500,000 or above |
$750,000 or above |
$403,000 or above |
$76.40 + your plan premium |
Editors’ Note: This article was originally published in 2020, but has been updated to reflect 2023 data.