Tax Blog

Why IRMAA Stays in Effect All Year

IRMAA is calculated based on your Modified Adjusted Gross Income (MAGI) from two years prior, unless you successfully appeal and have Social Security consider your current income instead. IRMAA does not automatically adjust mid-year just because your income changed this year.

In other words, once an IRMAA amount is set for the year, it will stay as-is until: A new calendar year begins, and Social Security has a newer tax return to use, or you request and receive a revised determination.

When IRMAA Will Drop Automatically

IRMAA is reviewed automatically every year. Each January, Social Security pulls the most recent eligible tax return from the IRS (still using the “two-year lookback” rule). If that more recent year’s income is below the IRMAA thresholds: Your IRMAA charge will be reduced or removed automatically for the new year.

Example: 2023 income is high → IRMAA applies in 2025. 2024 income returns to normal → IRMAA drops automatically in January 2026. If you do nothing, this is how IRMAA eventually corrects itself. But many taxpayers prefer not to wait that long and instead file an appeal to reduce IRMAA sooner.

If Social Security agrees the higher income was temporary and your ongoing income is lower, they may reduce or remove IRMAA for the remainder of the year and refund any overpayment.

Two Main Ways to Challenge IRMAA

1. Life-Changing Event (Form SSA-44)

   Use this if your reduced income is tied to:

   • Retirement or work stoppage
   • Reduction in work hours
   • Marriage or divorce
   • Death of a spouse
   • Loss of pension
   • Loss of income-producing property (beyond your control)
2. New Initial Determination (One-Time Income Spike)

   Use this approach if the high income came from a one-time event such as:

   • Sale of a home or rental property
   • Large capital gain or investment sale
   • Roth conversion or large IRA/401(k) distribution
   • Business sale or deferred compensation payout
   • Other non-recurring taxable event

What to Provide to Social Security

When you call or visit Social Security, it helps to have:

• 1. Your most recent tax return (or IRS transcript)
• 2. Proof that the income spike was one-time, such as:
• 3. Closing statement from a home or property sale
• 4. 1099-R or IRA distribution statement
• 5. Brokerage statements showing a single large gain
• 6. An estimate of your current-year income (Social Security, pension, RMDs, etc.)

How to Start the Process

To request an IRMAA review, you can: Call Social Security at 1-800-772-1213, or visit your local Social Security office in person.

Tell them something like: “My prior-year income included a one-time, non-recurring event that will not repeat. I’m requesting a new initial determination for IRMAA.”

If approved, changes typically appear within a few weeks, and any excess IRMAA premiums already paid are refunded or credited.

Summary

IRMAA usually stays in place for the entire calendar year. It will adjust automatically in a future year when Social Security has a tax return showing lower income. However, if your higher income was due to a one-time event, you can request a review now and may be able to have IRMAA reduced or removed sooner.