The majority of Medicare beneficiaries pay a standard monthly premium for Part B and Part D. But if your income rises above certain levels, you will owe more. This extra cost is known as the Income-Related Monthly Adjustment Amount, or IRMAA. Knowing how IRMAA operates can help you prepare for retirement and potentially take action to reduce your premiums.
What Exactly Is IRMAA?
IRMAA is a surcharge applied to your standard Medicare Part B and Part D premiums when your modified adjusted gross income (MAGI) exceeds a designated threshold. It is not a separate bill or tax — it is simply a higher premium that higher-income beneficiaries must pay.
The standard Part B premium for 2026 is $203.90 per month. Those subject to IRMAA pay between roughly $284 and $690 per month, depending on their income tier. The Part D IRMAA is an additional flat charge on top of your plan's regular premium, ranging from approximately $14.50 to $91 per month in 2026.
IRMAA is assessed on each individual separately. If you are married and both enrolled in Medicare, each spouse is evaluated based on the couple's joint income, and each pays their own surcharge.
Income Levels and Brackets
IRMAA is based on your MAGI as shown on your federal tax return. The Social Security Administration (SSA) looks at your tax return from two years prior to determine your current premium. For 2026 premiums, SSA references your 2024 tax return.
The income levels are adjusted each year. For 2026, the brackets for individuals filing single returns are:
| Modified Adjusted Gross Income (Single) | Part B Monthly Premium | Part D Surcharge | |---|---|---| | $109,000 or less | $203.90 (standard) | $0.00 | | $109,001 – $137,000 | $284.10 | $14.50 | | $137,001 – $171,000 | $405.80 | $37.50 | | $171,001 – $205,000 | $527.50 | $60.40 | | $205,001 – $499,999 | $649.20 | $83.30 | | $500,000 or above | $689.90 | $91.00 |
For married couples filing jointly, the corresponding thresholds are $218,000, $274,000, $342,000, $410,000, $749,999, and $750,000 or above. The precise amounts are updated annually by CMS and SSA, so it is wise to verify the current numbers during your planning.
How IRMAA Is Determined
The determination process follows a clear path:
- SSA receives your MAGI from the IRS, drawn from the federal tax return filed two years before the current coverage year.
- Your MAGI is measured against the published income brackets for that year.
- If your income exceeds the lowest threshold, you are placed in the corresponding bracket and your Part B and/or Part D premiums are increased accordingly.
- You receive a written notice. SSA mails a letter explaining your premium amount, including any IRMAA surcharge. This notice usually arrives before the coverage year begins.
Your MAGI includes your adjusted gross income plus any tax-exempt interest income. This means interest from tax-exempt municipal bonds, although not subject to federal income tax, does factor into IRMAA calculations.
Common income sources that feed into MAGI include wages, Social Security benefits (the taxable portion), pension distributions, retirement account withdrawals, capital gains, rental income, and tax-exempt interest.
How to Challenge an IRMAA Determination
If your income has fallen substantially since the tax year SSA used, you may be eligible to request a reduction. SSA recognizes specific life-changing events that may qualify you for a new assessment:
- Marriage or divorce
- Death of a spouse
- Work stoppage or reduction
- Loss of income from income-producing property
- Loss of pension income
- Employer settlement payment
To request a review, you submit Form SSA-44 (see our detailed walkthrough on how to appeal your IRMAA surcharge) (Medicare Income-Related Monthly Adjustment Amount — Life Changing Event) to your local Social Security office. You will need to provide documentation of the event along with your revised income estimate. If approved, your premiums will be adjusted, and you may receive a refund for any overpayment.
It is worth noting that general market losses, such as a decline in your investment portfolio, do not qualify as life-changing events for IRMAA appeal purposes.
Strategies to Lower IRMAA
While you cannot eliminate IRMAA entirely if your income is high, there are legitimate planning approaches that may help keep your MAGI below higher brackets:
- Control retirement account withdrawals. Large distributions from traditional IRAs or 401(k) plans raise your MAGI. Spreading withdrawals over multiple years or converting to Roth accounts earlier (before Medicare enrollment) can help.
- Time Roth conversions carefully. Roth conversions increase your MAGI in the year of conversion, but future Roth withdrawals do not count toward MAGI. Converting in years before you turn 65 may lower IRMAA exposure later.
- Watch capital gains. Selling appreciated assets in a single year can push you into a higher IRMAA bracket. Consider spreading sales across multiple tax years.
- Work with your tax advisor. Because IRMAA relies on a two-year lookback, planning must happen well ahead of time. A tax professional can model various income scenarios and their effect on future Medicare premiums.
- Keep tax-exempt interest in mind. Remember that tax-exempt bond interest counts toward MAGI for IRMAA purposes, even though it is exempt from federal income tax.
IRMAA affects a comparatively small share of Medicare beneficiaries, but for those who are subject to it, the added cost can be significant — potentially adding several thousand dollars per year in premium expenses. Proactive income planning and awareness of the two-year lookback window are your strongest tools for managing this surcharge.