The IRMAA system selects the SSNs of beneficiaries who were or are entitled to Medicare
Part B or enrolled in a Medicare prescription drug plan with any of the following
characteristics in the Medicare Data Base record for the current year:
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Used PY-3 to determine the IRMAA, or
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•
Beneficiary supplied tax returns for PY-2 or PY-1 MAGI, or
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•
Beneficiary provided estimate for PY-2 or PY-1, or
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•
Beneficiary provided statement attesting to no need to file a tax return or IRS transcript
indicating no tax return was filed.
If
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Then
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Why
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SSA used PY-3 to determine the current year IRMAA
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SSA will ask IRS for PY-2 MAGI and adjust current year IRMAA if necessary.
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Law requires SSA to use PY-2 MAGI information; PY-3 information may be used only temporarily.
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SSA used a PY-2 or PY-1 MAGI estimate provided by the beneficiary to determine the
current year IRMAA after SSA originally used PY-3
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SSA will ask IRS for PY-2 and PY-1 MAGI (if appropriate) to verify the information
being used for the current year.
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The law usually requires SSA to use PY-2 MAGI to set the premium. However, SSA can
use a more recent tax year if there has been a life-changing event, which results
in a significant reduction in MAGI. SSA needs to know the PY-2 MAGI in order to determine
if the use of a more recent tax year meets the “significant reduction” requirement.
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SSA used a more recent MAGI estimate provided by the beneficiary to determine the
current year IRMAA after SSA originally used PY-2
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SSA will ask IRS for the MAGI for the tax year of the estimate.
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IRS data is the standard in the law.
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SSA used a signed copy of the beneficiary’s tax return for PY-2 when IRS returned
PY-3 information.
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SSA will ask IRS for PY-2 MAGI.
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IRS PY-2 data is the standard in the law.
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SSA used an amended tax return (with proof of IRS acceptance) received from the beneficiary
to determine the current year IRMAA
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No verification takes place.
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IRS verification of the amended return was obtained at the time the beneficiary submitted
the return (HI 01120.045)
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SSA used IRS corrected MAGI information (with proof from IRS) received from the beneficiary
to set the current year IRMAA
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No verification takes place.
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IRS verification of the corrected tax data was obtained at the time the beneficiary
submitted the correction (HI 01120.050).
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NOTE: If we receive information from IRS during verification of the beneficiary supplied
data that results in IRMAA equal to or higher than the result of using IRS provided
PY-2 data, the IRMAA system will use PY-2 for the IRMAA determination.