I keep an eye on our IRMAA limits with respect to our SS, foreign pension and Roth conversions.
This year we are running close to our buffered amount, but I would like to have a little more cash to see out the year.
I know a Roth distribution is tax-free (it’s all qualified - over 59 1/2, in place more than 5 years etc), but does it count as income for AGI purposes?
You would think a simple Google query would give a straight answer but mostly it gets results about contributions and the non-taxable aspect.
I’m pretty sure there will be a place to report it based on the distribution code but will it count as income?
Under current law*, the MAGI used to calculate IRMAA premiums is your AGI plus any tax exempt interest.
Qualified Roth distributions, and non-qualified distributions that are not subject to taxation do not count toward AGI, so they would not impact the IRMAA calculations. If the distribution is subject to taxation, it will add to your AGI and impact IRMAA calculations.
I will also point out that the IRMAA thresholds that will be applied to 2024 tax returns for 2026 premiums have not been set yet. Unless inflation goes to 0 or turns into deflation in 2025, you will have wiggle room above the thresholds that will be used to calculate the 2025 premiums, which were just announced 2025 Medicare Parts A & B Premiums and Deductibles | CMS
*At some point, I expect the loophole of not counting Roth income toward things like IRMAA will be closed.