MAGI Income Questions
It appears there are so many different MAGI calculations depending on what topic MAGI is calculated for. My question for purposes of determining Medicare monthly premium increase/penalty based on MAGI is the following. Does untaxable SS benefits gets added back and do Roth conversions get added back?
I know for Roth IRA contribution purposes Roth conversions are removed from the MAGI calculation and only the taxable amount of SS is included.
However for the ACA MAGI, all SS is included.
I can’t locate any info to help determine if I need to added back untaxable SS to properly calculate MAGI to keep clients below certain income groups.
Permalink Submitted by tomd37 on Fri, 2020-09-25 15:36
The Program Operations Manual System (POMS) for SS indicates the MAGI is the sum of the beneficiary’s AGI plus tax-exempt interest. That tells me that only the taxable portion of SS is included in MAGI. I found this info by just Googling MAGI for IRMAA. I too am doing Roth conversions the last two years and have looked this up extensively. Don’t forget that if you file MFJ any premium adjustment applies to both spouses.
Permalink Submitted by Ken Fitzgerald on Sat, 2020-09-26 03:32
I found this link helpful in explaining IRMAA in 2019 when I was going to break the IRMAA ceiling and go into surcharge territory. There are running comments below the article as well. https://thefinancebuff.com/medicare-irmaa-income-brackets.html