Miranda is an award-winning freelancer who has covered various financial markets and topics since 2006. In addition to writing about personal finance, investing, college planning, student loans, insurance, and other money-related topics, Miranda is an avid podcaster and co-hosts the Money Talks News podcast.
Doug is a Chartered Alternative Investment Analyst who spent more than 20 years as a derivatives market maker and asset manager before “reincarnating” as a financial media professional a decade ago.
Before joining Britannica, Doug spent nearly six years managing content marketing projects for a dozen clients, including The Ticker Tape, TD Ameritrade’s market news and financial education site for retail investors. He has been a CAIA charter holder since 2006, and also held a Series 3 license during his years as a derivatives specialist.
Doug previously served as Regional Director for the Chicago region of PRMIA, the Professional Risk Managers’ International Association, and he also served as editor of Intelligent Risk, PRMIA’s quarterly member newsletter. He holds a BS from the University of Illinois at Urbana-Champaign and an MBA from Illinois Institute of Technology, Stuart School of Business.
Medicare IRMAA is an income-based surcharge that higher-income beneficiaries pay on top of their Part B and Part D premiums. IRMAA stands for income-related monthly adjustment amount. The surcharge is based on your modified adjusted gross income (MAGI) from two years earlier and applies when your income exceeds certain thresholds.
How does Medicare determine if you owe IRMAA?
Medicare generally uses your federal income tax return from two years earlier to determine whether you owe IRMAA. For example, your 2026 surcharge is based on your 2024 modified adjusted gross income (MAGI). Because of this two-year look-back, you could owe IRMAA even if your income has fallen substantially since then.
What events can qualify you for an IRMAA recalculation?
You may qualify for an IRMAA recalculation if your income has fallen because of a life-changing event. Qualifying events include retirement, stopping work or reducing your hours, marriage, divorce, death of a spouse, loss of income-producing property, an employer settlement payment, or the loss or reduction of pension income.
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The more you earn in retirement, the more Medicare costs.
It often starts with a letter from the Social Security Administration (SSA). Instead of the Medicare premium you expected, youâre told youâll owe an income-related monthly adjustment amount (IRMAA) that can add hundreds of dollars to your annual health care costs.
Medicare IRMAA is a surcharge that higher-income beneficiaries pay on top of their Part B (medical insurance) and Part D (prescription drug) premiums. Itâs based on your modified adjusted gross income (MAGI) from two years earlier, which means your current income may have little to do with the premium you pay today. And itâs not just a high salary that can trigger IRMAA. A Roth IRA conversion, the sale of appreciated assets, or a large distribution from a retirement account can temporarily push you into a higher IRMAA bracket, even if your annual retirement income is typically much lower.
Key Points
RMAA is an income-based surcharge added to Medicare Part B and Part D premiums for higher-income beneficiaries.
Medicare generally uses your federal tax return from two years earlier to determine whether you owe IRMAA.
Life-changing events, including retirement or the death of a spouse, may qualify you for a Medicare IRMAA reduction through an appeal.
Understanding how IRMAA works can help you avoid surprises, plan withdrawals from retirement accounts more strategically, and know when you can appeal a surcharge (i.e., request a recalculation) after a major life change.
What is Medicare IRMAA?
Congress created IRMAA in 2003 as part of the Medicare Modernization Act to require higher-income enrollees to pay a larger share of Medicareâs costs. Most recipients pay only the standard Part B premium, but if your income exceeds certain thresholds, youâll pay more. If youâre enrolled in Part D, youâll also pay an income-related surcharge in addition to your plan premium.
Medicare IRMAA doesnât typically affect Medicare Part A (hospitalization) premiums, especially for those who qualify for premium-free Part A. But if you have a Medicare Advantage plan (Part C), the Part B IRMAA can influence your Medicare Advantage costs.
How Medicare determines whether you owe IRMAA
Unlike many taxes or benefits that rely on current income, Medicare looks back two years to determine whether you owe IRMAA. The SSA typically uses your federal income tax return from two years ago. For example, to decide whether you need to pay a Medicare income surcharge in 2026, your 2024 MAGI is used.
This two-year look-back means that if you retired this year, you could still owe IRMAA based on the higher salary you earned two years ago.
Even for retirees, large one-time sources of income can unexpectedly increase the MAGI used to determine IRMAA:
Taxable capital gains from selling investments or real estateÂ
2026 Medicare IRMAA brackets
Medicare IRMAA thresholds are adjusted annually. In 2026, your Medicare Part B premium is based on your 2024 MAGI and your filing status.
Individual filer
Married filing jointly
Married filing separately
Part B premium
Part D premium
$109,000 or less
$218,000 or less
$109,000 or less
$202.90 (standard)
Your regular plan premium
Above $109,000 up to $137,000
Above $218,000 up to $274,000
N/A
$284.10
$14.50 + your plan premium
Above $137,000 up to $171,000
Above $274,000 up to $342,000
N/A
$405.80
$37.50 + your plan premium
Above $171,000 up to $205,000
Above $342,000 up to $410,000
N/A
$527.50
$60.40 + your plan premium
Above $205,000 and less than $500,000
Above $410,000 and less than $750,000
Above $109,000 and less than $391,000
$649.20
$83.30 + your plan premium
$500,000+
$750,000+
$391,000+
$689.90
$91+ your plan premium
IRMAA isnât a tax; itâs a premium adjustment based on your income. Because the surcharge is tied to your MAGI from two years earlier, tax-planning decisions you make today can affect what you pay for Medicare in the future.
Why it may not pay to avoid IRMAA
Sometimes paying slightly higher Medicare premiums makes financial sense. For example, a Roth conversion may push you into an IRMAA bracket, but the long-term tax benefits of a Rothâtax-free withdrawals and no RMDsâcould offset the costs. Before taking an âavoid IRMAA at all costsâ mentality, consider the whole picture, both short- and long-term.
How to request an IRMAA recalculation
Sometimes the tax return used to determine your IRMAA no longer reflects your current financial situation. If your income has fallen because of a qualifying life-changing event, you can ask the SSA to recalculate your IRMAA. Although many people refer to this as an IRMAA appeal, the process begins by requesting a recalculation. Qualifying life-changing events include:
Retirement, stopping work, or reduced work hours
Loss of income-producing property
Death of a spouse
Divorce
Marriage
Employer settlement payment
Loss or reduction of pension income
For example, suppose your MAGI was $240,000 in 2024 and you retired in 2025. Medicare may use your 2024 income to calculate your 2026 IRMAA, even though your income has since fallen substantially. Requesting an IRMAA recalculation could reduce or eliminate the surcharge.
Investment losses arenât considered qualifying life-changing events and generally wonât qualify you for an IRMAA recalculation.
How to file for an IRMAA recalculation
Start by completing Form SSA-44 to report a qualifying life-changing event and request a lower IRMAA. Next, gather documentation to support your request. Depending on the situation, you might need a retirement notice from your employer, pension statements, a divorce decree, or a marriage or death certificate.
Submit Form SSA-44 and your supporting documentation to the SSA through its online portal, by mail, or through your local Social Security office.
If your request is approved, you could see lower future Medicare premiums, and you may receive a refund for any IRMAA you overpaid.
Strategies to reduce or avoid IRMAA
Because Medicare bases your premiums on income from two years earlier, reducing future Medicare IRMAA starts with managing your taxable income before you cross a higher income threshold.Â
Spread out Roth conversions. Because a large Roth conversion in one year can temporarily increase your MAGI to trigger IRMAA later, consider spreading out conversions over multiple years to keep your income below the threshold.
Pay attention to capital gains. Similarly, selling appreciated assets all at once can move you into a higher IRMAA bracket. Consider how you can offset capital gains or sell assets across multiple tax years.
Coordinate retirement withdrawals. Build a tax-diverse retirement account withdrawal strategy that allows you to use a mix of taxable, tax-deferred, and Roth accounts to keep your income below IRMAA thresholds.
Consider these strategies before you need to begin taking RMDs. In fact, some of these strategies can help you avoid large RMDs, which could also push you into a higher IRMAA bracket.
The bottom line
When it comes to Medicare costs and taxes in retirement, every dollar counts. Medicare IRMAA is based on more than just how much you earn; it also depends on when you recognize income. Understanding the two-year look-back can help you make more informed tax and retirement planning decisions. And if your income falls because of a qualifying life-changing event, requesting an IRMAA recalculation could help keep more of those dollars in your pocket.Â
