IRMMA appeal

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Topic Author
jdc10909
Posts: 12
Joined: Sun Jan 21, 2018 12:48 pm

IRMMA appeal

Post by jdc10909 »

I plan to retire 6/30/2023. I will be 65 in July 2023. Retiring is a IRMMA life changing event (LCE). My MAGI will be under the IRMMA threshold for 2023 (tax year 2021).

My MAGI will be over to the third IRMMA tier (due to Roth conversions) for 2024 (tax year 2022) and 2025 (tax year 2023).
I expect a letter from Social Security for an IRMMA increase in 2024 based on my 2022 tax return and also the same for 2025 based upon my 2023 return.

If I file form SSA-44 (appeal IRMMA) in 2024 to reduce the IRMMA amount due to the retirement of June 2023 based upon my 2024 estimated MAGI of $116,000 will this work and put me back to paying MFJ under $194,000 – at approx. $164.90.

Will I also need to do another appeal in 2025 with the same MAGI of $116,000 (static pension income only)?

Thanks in advance for any input.
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WoodSpinner
Posts: 3504
Joined: Mon Feb 27, 2017 12:15 pm

Re: IRMMA appeal

Post by WoodSpinner »

OP,

I believe you will — anecdotal reading of other’s experiences.
WoodSpinner
User avatar
Wiggums
Posts: 7050
Joined: Thu Jan 31, 2019 7:02 am

Re: IRMMA appeal

Post by Wiggums »

This is my understanding, but I never submitted an appeal. Hopefully a forum member has successfully appealed a situation like yours.

SSA does not consider the execution of a conversion or the lower income following a large conversion year to be a life changing event. Even if the person did the conversion the year following retirement, the conversion year will be a year later than the loss of wage income. If person retired in 2020 and income dropped in 2021, they could appeal the 2022 surcharge, but if the person converted in 2021, driving the 2023 IRMAA surcharge, appealing the 2023 surcharge would likely be a waste of time.

Due to conversion driven IRMAA surcharges, it is recommended that the surcharge be factored into the decision on how much to convert, in addition to the marginal tax rate due. IRMAA therefore contributes to the comparison of the conversion cost with future tax rates on IRA distributions if a conversion was not done to reduce the IRA balance.
"I started with nothing and I still have most of it left."
Topic Author
jdc10909
Posts: 12
Joined: Sun Jan 21, 2018 12:48 pm

Re: IRMMA appeal

Post by jdc10909 »

Thanks for the replies, some updated info - I understand that Roth conversions are not a LCE. The Roth conversions happened last year (2022) and this year (2023).

I plan to retire in June 2023 or if need be in Jan 2024 (whatever works best). Thanks Again
Navillus1968
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Location: FL Tampa Bay

Re: IRMMA appeal

Post by Navillus1968 »

jdc10909 wrote: Sat Mar 25, 2023 9:55 pm Thanks for the replies, some updated info - I understand that Roth conversions are not a LCE. The Roth conversions happened last year (2022) and this year (2023).

I plan to retire in June 2023 or if need be in Jan 2024 (whatever works best). Thanks Again
Thanks for clearing that up, the way your OP was written made my brain hurt.

There's always a Kitces article-
"Notably, newly minted retirees over age 65 (who start Medicare immediately after retirement) will usually need to file Form SSA-44 to report their “Work Stoppage” and avoid having their pre-retirement wages treated as part of their MAGI when determining IRMAA surcharges in the first full year of retirement."
https://www.kitces.com/blog/irmaa-medic ... hresholds/

In your case, you will file Form SSA-44 in two consecutive years with "Work Stoppage" as the LCE in 2024 & 2025.

Here's another link with more details on filing Form SSA-44- https://www.medicaremindset.com/irmaa
Topic Author
jdc10909
Posts: 12
Joined: Sun Jan 21, 2018 12:48 pm

Re: IRMMA appeal

Post by jdc10909 »

Thank for the links and the input. much appreciated
chemocean
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Re: IRMMA appeal

Post by chemocean »

My understanding from this forum is you will eventually pay the proper IRMMA for your AGI of that year. Regardless of an appeal, you will get a refund if you paid too much some time after you file your taxes the following year. Likewise, if you don't pay enough, you will get a bill for the underpayment of after you file your taxes the following year.
An appeal simply allows allows you to lower your current Medicare payment to the anticipated correct payment due to a life changing event (LCE) regardless how this LCE affected your AGI. Work stoppage is a LCE and thus you can appeal. In the appeal, you predict your AGI for the period of the appeal. If you misjudge your AGI either by underestimating or overestimating, Medicare will eventually correct the amount based on your actual AGI.
ikowik
Posts: 392
Joined: Tue Dec 23, 2014 5:52 pm

Re: IRMMA appeal

Post by ikowik »

My personal experience corroborates what above posters said. I retired mid-way 2022 and joined Medicare. Social Security (not Medicare) sent me a letter that based on my income from 2020, I would pay the first tier IRMAA. I appealed by filing Form SSA-4 (cannot be filed online) with an estimate of my 2022 AGI/MAGI which would put me under IRMAA cut-off. While waiting for a decision, I continued to pay IRMAA through my bank as I have not started Social Security benefits.
Couple of months later, received a letter agreeing that I need not pay IRMAA. Medicare premiums for the next few months dropped to adjust for the prior over payments.
Went through the same process in January 2023 as my premiums were based on 2021 tax return. I expect this will not be necessary from 2024 onward.
Topic Author
jdc10909
Posts: 12
Joined: Sun Jan 21, 2018 12:48 pm

Re: IRMMA appeal

Post by jdc10909 »

Thank you chemocean and ikowik for your replies and input. What a great forum this is to exchange information and ideas for the benefit of all. Thanks Uncle Jack!
Big Dog
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Re: IRMMA appeal

Post by Big Dog »

Went thru this process during covid, when I was laid off, but severance and pro-rata bonus kicked me into IRMAA levels. Year 1 was approved quickly. The Year 2 appeal was rejected, but they did not state why the letter. I called and asked why it was rejected, what was wrong with my numbers as I was clearly laid off (with a letter from VP HR), but they couldn't tell me; said I could appeal this decision, So had to appeal the appeal. And once that was approved, I received a refund.
Topic Author
jdc10909
Posts: 12
Joined: Sun Jan 21, 2018 12:48 pm

Re: IRMMA appeal

Post by jdc10909 »

Thanks, Big Dog, glad it worked out. Hopefully mine will too!
ralph124cf
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Joined: Tue Apr 01, 2014 11:41 am

Re: IRMMA appeal

Post by ralph124cf »

When I turned 65 and retired, I went in to Medicare in person and applied for the IRMMA reduction. It was granted on the spot.

Two months later, my wife turned 65, and her IRMMA reduction application was rejected. It took us six months to get that straightened out.

Ralph
SuzBanyan
Posts: 2015
Joined: Thu Jun 02, 2016 11:20 am

Re: IRMMA appeal

Post by SuzBanyan »

Just so I’m clear, you expect to have income in 2024 that is lower than IRMAA, but your income in 2022 and 2023 would be above IRMAA.

If my understanding is correct, you can apply in late 2023 or 2024 to ask SS to use estimated 2024 income to determine 2024 IRMAA based on the life changing event of reducing/eliminating work hours. You could then apply again to use 2024 to determine 2025. 2024 will automatically determine 2026. Obviously, this only works if your actual 2024 MAGI is lower than the IRMAA threshold.
Topic Author
jdc10909
Posts: 12
Joined: Sun Jan 21, 2018 12:48 pm

Re: IRMMA appeal

Post by jdc10909 »

SuzBanyan, thanks for the replay, you have it correct, my income in 2024 will be lower than IRMAA, but my income in 2022 and 2023 is above IRMAA. I will retire at the end of June in 2023.

Based upon your post, it sounds like I should be good. Based upon the LCE in June 2023, I should appeal IRMMA in late 2023 or early 2024 and then again in 2025 if need be – thank you.
single2019
Posts: 269
Joined: Thu May 27, 2021 12:13 pm

Re: IRMMA appeal

Post by single2019 »

chemocean wrote: Sat Mar 25, 2023 11:37 pm My understanding from this forum is you will eventually pay the proper IRMMA for your AGI of that year. Regardless of an appeal, you will get a refund if you paid too much some time after you file your taxes the following year. Likewise, if you don't pay enough, you will get a bill for the underpayment of after you file your taxes the following year.
An appeal simply allows allows you to lower your current Medicare payment to the anticipated correct payment due to a life changing event (LCE) regardless how this LCE affected your AGI. Work stoppage is a LCE and thus you can appeal. In the appeal, you predict your AGI for the period of the appeal. If you misjudge your AGI either by underestimating or overestimating, Medicare will eventually correct the amount based on your actual AGI.
That is not my understanding from this forum. I believe that Medicare would not correct automatically without an appeal. Can folks who have gone through the process opine?
SuzBanyan
Posts: 2015
Joined: Thu Jun 02, 2016 11:20 am

Re: IRMMA appeal

Post by SuzBanyan »

single2019 wrote: Mon Mar 27, 2023 10:23 pm
chemocean wrote: Sat Mar 25, 2023 11:37 pm My understanding from this forum is you will eventually pay the proper IRMMA for your AGI of that year. Regardless of an appeal, you will get a refund if you paid too much some time after you file your taxes the following year. Likewise, if you don't pay enough, you will get a bill for the underpayment of after you file your taxes the following year.
An appeal simply allows allows you to lower your current Medicare payment to the anticipated correct payment due to a life changing event (LCE) regardless how this LCE affected your AGI. Work stoppage is a LCE and thus you can appeal. In the appeal, you predict your AGI for the period of the appeal. If you misjudge your AGI either by underestimating or overestimating, Medicare will eventually correct the amount based on your actual AGI.
That is not my understanding from this forum. I believe that Medicare would not correct automatically without an appeal. Can folks who have gone through the process opine?
Your understanding is consistent with mine. The only automatic correction I have heard about is when IRMAA is based on incomplete tax information. For example, you file your 2020 return by mail in October 2021 and the IRS is still processing it in late 2022. That might result in IRMAA being charged in 2023 then automatically corrected if the processed return ultimately shows a MAGI below the IRMAA threshold.

If, on the other hand, you want and are entitled to have your IRMAA determined by a year other than the one 2 years prior, I believe you have to appeal.

I think the more common automatic adjustment is when you appeal and ask to have IRMAA based on a year for which you have not yet finalized your taxes. Your estimate of taxes may get a reduction or elimination of IRMAA, but if your actual MAGI when you file your return is high enough to require IRMAA, then there is an automatic correction to charge you IRMAA for prior periods. In the OP’s case this could happen if he files an appeal for 2024 and estimates his 2024 income is $116k. However, if when he files his 2024 return, it actually shows $216k of MAGI, IRMAA will likely be due for all of 2024.
Topic Author
jdc10909
Posts: 12
Joined: Sun Jan 21, 2018 12:48 pm

Re: IRMMA appeal

Post by jdc10909 »

Thanks, SuzUZBanyan. My MAGI in 2024 will be approx. $116K (only pension income). I believe I will do a Roth conversion approx. $60k and will still be below the IRMMA threshold and should qualify via appeal a reduction based upon my 2024 estimated MAGI, not the MAGI from 2022 (via LCE).
I believe this is correct.
Faith20879
Posts: 1242
Joined: Fri Mar 02, 2007 9:16 am

Re: IRMMA appeal

Post by Faith20879 »

jdc10909 wrote: Sat Mar 25, 2023 9:30 pm I plan to retire 6/30/2023. I will be 65 in July 2023. Retiring is a IRMMA life changing event (LCE). My MAGI will be under the IRMMA threshold for 2023 (tax year 2021).

My MAGI will be over to the third IRMMA tier (due to Roth conversions) for 2024 (tax year 2022) and 2025 (tax year 2023).
I expect a letter from Social Security for an IRMMA increase in 2024 based on my 2022 tax return and also the same for 2025 based upon my 2023 return.

If I file form SSA-44 (appeal IRMMA) in 2024 to reduce the IRMMA amount due to the retirement of June 2023 based upon my 2024 estimated MAGI of $116,000 will this work and put me back to paying MFJ under $194,000 – at approx. $164.90.

Will I also need to do another appeal in 2025 with the same MAGI of $116,000 (static pension income only)?

Thanks in advance for any input.
For the bolded part, my answer is no. Here is my reasoning:
2023 starts Medicare on your 2021 income. You appeal based on your 2023 income.
2024 premium base on your 2022 income. You appeal base on your 2023 income.
2025 premium base on your 2023 income. You shouldn't need to appeal because (you said) income is under the threshold.

Not an expert just an individual who has appealed successfully 2 consecutive years.


I misread OP's incomes and years.
Last edited by Faith20879 on Tue Mar 28, 2023 5:05 pm, edited 1 time in total.
SuzBanyan
Posts: 2015
Joined: Thu Jun 02, 2016 11:20 am

Re: IRMMA appeal

Post by SuzBanyan »

Faith20879 wrote: Tue Mar 28, 2023 1:48 pm
jdc10909 wrote: Sat Mar 25, 2023 9:30 pm I plan to retire 6/30/2023. I will be 65 in July 2023. Retiring is a IRMMA life changing event (LCE). My MAGI will be under the IRMMA threshold for 2023 (tax year 2021).

My MAGI will be over to the third IRMMA tier (due to Roth conversions) for 2024 (tax year 2022) and 2025 (tax year 2023).
I expect a letter from Social Security for an IRMMA increase in 2024 based on my 2022 tax return and also the same for 2025 based upon my 2023 return.

If I file form SSA-44 (appeal IRMMA) in 2024 to reduce the IRMMA amount due to the retirement of June 2023 based upon my 2024 estimated MAGI of $116,000 will this work and put me back to paying MFJ under $194,000 – at approx. $164.90.

Will I also need to do another appeal in 2025 with the same MAGI of $116,000 (static pension income only)?

Thanks in advance for any input.
For the bolded part, my answer is no. Here is my reasoning:
2023 starts Medicare on your 2021 income. You appeal based on your 2023 income.
2024 premium base on your 2022 income. You appeal base on your 2023 income.
2025 premium base on your 2023 income. You shouldn't need to appeal because (you said) income is under the threshold.

Not an expert just an individual who has appealed successfully 2 consecutive years.
My understanding of the OP’s MAGI for each year is different than yours.

2021 MAGI is less than IRMAA threshold. OP can do nothing and pay no IRMAA for 2023.
2022 MAGI is more than IRMAA threshold. OP must do something to avoid paying IRMAA in 2024.
2023 MAGI is more than IRMAA threshold. OP must do something to avoid paying IRMAA in 2025.
2024 MAGI is expected to be less than the IRMAA threshold. OP can do nothing and pay no IRMAA in 2026.

OP wants to use 2024 MAGI to calculate IRMAA in both 2024 and 2025. He will likely need to appeal both years to make that happen.
Faith20879
Posts: 1242
Joined: Fri Mar 02, 2007 9:16 am

Re: IRMMA appeal

Post by Faith20879 »

SuzBanyan wrote: Tue Mar 28, 2023 4:30 pm
Faith20879 wrote: Tue Mar 28, 2023 1:48 pm
jdc10909 wrote: Sat Mar 25, 2023 9:30 pm I plan to retire 6/30/2023. I will be 65 in July 2023. Retiring is a IRMMA life changing event (LCE). My MAGI will be under the IRMMA threshold for 2023 (tax year 2021).

My MAGI will be over to the third IRMMA tier (due to Roth conversions) for 2024 (tax year 2022) and 2025 (tax year 2023).
I expect a letter from Social Security for an IRMMA increase in 2024 based on my 2022 tax return and also the same for 2025 based upon my 2023 return.

If I file form SSA-44 (appeal IRMMA) in 2024 to reduce the IRMMA amount due to the retirement of June 2023 based upon my 2024 estimated MAGI of $116,000 will this work and put me back to paying MFJ under $194,000 – at approx. $164.90.

Will I also need to do another appeal in 2025 with the same MAGI of $116,000 (static pension income only)?

Thanks in advance for any input.
For the bolded part, my answer is no. Here is my reasoning:
2023 starts Medicare on your 2021 income. You appeal based on your 2023 income.
2024 premium base on your 2022 income. You appeal base on your 2023 income.
2025 premium base on your 2023 income. You shouldn't need to appeal because (you said) income is under the threshold.

Not an expert just an individual who has appealed successfully 2 consecutive years.
My understanding of the OP’s MAGI for each year is different than yours.

2021 MAGI is less than IRMAA threshold. OP can do nothing and pay no IRMAA for 2023.
2022 MAGI is more than IRMAA threshold. OP must do something to avoid paying IRMAA in 2024.
2023 MAGI is more than IRMAA threshold. OP must do something to avoid paying IRMAA in 2025.
2024 MAGI is expected to be less than the IRMAA threshold. OP can do nothing and pay no IRMAA in 2026.

OP wants to use 2024 MAGI to calculate IRMAA in both 2024 and 2025. He will likely need to appeal both years to make that happen.
Suz, I see my mistake. I misread his years. I've retrieved my answer.
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