For most people, retirement income planning is about not running out of money. For Medicare beneficiaries, it is also about a surcharge most never see coming: Medicare IRMAA, the Income-Related Monthly Adjustment Amount. Cross a single income threshold by one dollar two years before you enroll, and your Medicare premiums can jump by thousands of dollars for the year, with no warning and no marginal cushion. The good news is that IRMAA is almost entirely a function of one number you can plan around: modified adjusted gross income.
What is Medicare IRMAA?
Medicare IRMAA is a surcharge that higher-income beneficiaries pay on top of the standard Medicare Part B and Part D premiums. It is authorized by Section 1839(i) of the Social Security Act, administered by the Social Security Administration, and assessed separately for each person enrolled in Medicare.
In 2026, the standard Part B premium is $202.90 per month. Beneficiaries whose income sits above the first threshold pay that base plus an IRMAA add-on, and a second IRMAA applies to Part D drug coverage. The surcharge is not a tax on the income itself; it is an increase in what you pay for Medicare, and it resets every year based on a fresh look at your income. For a fuller treatment of the income measure that drives it, see our entry on IRMAA.
How much is IRMAA in 2026?
For 2026, IRMAA is based on your 2024 modified adjusted gross income and ranges from $0 to an extra $487.00 per month on Part B and up to $91.00 per month on Part D, using the premium amounts the Centers for Medicare and Medicaid Services (CMS) set for 2026. The table below shows the total monthly Part B premium (the $202.90 base plus the IRMAA add-on) and the Part D surcharge at each tier.
| 2024 MAGI, single | 2024 MAGI, married joint | Total Part B (monthly) | Part D surcharge (monthly) |
|---|---|---|---|
| $109,000 or less | $218,000 or less | $202.90 | $0 |
| $109,001 to $137,000 | $218,001 to $274,000 | $284.10 | $14.50 |
| $137,001 to $171,000 | $274,001 to $342,000 | $405.80 | $37.50 |
| $171,001 to $205,000 | $342,001 to $410,000 | $527.50 | $60.40 |
| $205,001 to $499,999 | $410,001 to $749,999 | $649.20 | $83.30 |
| $500,000 or more | $750,000 or more | $689.90 | $91.00 |
The Part B IRMAA add-ons embedded above are $81.20, $202.90, $324.60, $446.30, and $487.00 per month as you move up the tiers. Because the surcharge is per person, a married couple where both spouses are enrolled in Medicare pays it twice. At the top tier, two spouses can pay roughly $13,900 a year in combined IRMAA on Part B and Part D alone, over and above the base premiums.
Married Filing Separately Is Treated Harshly
ImportantMarried taxpayers who file separately and lived with their spouse at any point during the year do not get the gradual single-filer tiers. For 2026, MAGI above $109,000 jumps almost straight to the high surcharge (a total Part B premium of $649.20 plus $83.30 of Part D), and MAGI of $391,000 or more lands at the top ($689.90 plus $91.00). Filing separately to manage IRMAA usually backfires for this reason, and the choice should be modeled across the entire return.
What income counts toward IRMAA?
IRMAA uses modified adjusted gross income, defined narrowly for this purpose as your adjusted gross income (Form 1040 line 11) plus any tax-exempt interest (line 2a). There are no other add-backs, which makes it one of the simpler MAGI definitions in the tax code, but it still catches more than people expect.
Two features surprise new retirees. First, tax-exempt municipal bond interest is added back, so income that is free of income tax is not free of IRMAA. Second, nearly every common source of retirement income flows through adjusted gross income and therefore into IRMAA: traditional IRA and 401(k) withdrawals, required minimum distributions, pensions, annuity income, capital gains, dividends, and the taxable portion of Social Security. Roth withdrawals are the notable exception, because qualified Roth distributions are not included in AGI at all.
Why is IRMAA a cliff instead of a bracket?
IRMAA is an all-or-nothing cliff: crossing a threshold by a single dollar imposes the entire higher surcharge for the full year, unlike income tax brackets, where only the dollars above a threshold are taxed at the higher rate. There is no marginal blending and no partial credit for being barely over.
The math is unforgiving. A married couple with 2024 MAGI of $218,001, one dollar over the first joint threshold, pays roughly $1,148 more per person for 2026 than a couple at $218,000 ($81.20 of Part B plus $14.50 of Part D, times 12), about $2,297 for the household, all triggered by that last dollar. Higher up, jumping from the second to the third tier costs roughly $1,736 per person for the year ($144.60 more per month, times 12). This cliff structure is exactly why IRMAA rewards precise income management: keeping MAGI even slightly under the next threshold can be worth thousands.
The Top Bracket Is Frozen
NoticeThe lower IRMAA thresholds are indexed to inflation each year, but the top bracket ($500,000 single and $750,000 joint) has been frozen since 2018 and stays frozen through 2027, with the first inflation adjustment not scheduled until 2028. As incomes rise with inflation, that frozen ceiling quietly pulls more high earners into the top surcharge over time.
Which tax-planning moves lower IRMAA?
The lever is always the same: control modified adjusted gross income in the years that feed the two-year look-back. Because IRMAA looks back two years, the planning often happens well before you enroll in Medicare, and the most effective moves are sequenced over several years rather than executed in a panic at age 65. The strategies below are the ones we use most often.
Do Roth conversions early, before the look-back window
A Roth conversion adds to MAGI in the year you convert, so converting at or after age 63 can directly raise your first Medicare-year premiums. Converting earlier, in lower-income years before age 63, moves the taxable income outside the two-year window that sets your initial IRMAA, shrinks future required minimum distributions, and creates a Roth balance whose later withdrawals never count toward IRMAA at all. This is the single most powerful long-range IRMAA lever for people with large traditional balances. High earners who are still working can build that Roth balance even faster through a Mega Backdoor Roth.
Use qualified charitable distributions instead of taxable RMDs
A qualified charitable distribution sends money directly from your IRA to a charity, satisfies your RMD, and is excluded from AGI entirely. QCDs are available from age 70 and a half, even before required minimum distributions begin at 73. That is strictly better for IRMAA than taking the RMD and then deducting a gift, because an itemized charitable deduction does not reduce MAGI but a QCD does. For a retiree near a bracket, redirecting even part of an RMD as a QCD can keep MAGI under the next cliff.
Time capital gains and harvest losses
Capital gains count in MAGI, so realizing a large gain in a single year can push you up one or more tiers. Spreading sales across multiple tax years, harvesting losses to offset gains through tax-loss harvesting, and coordinating the sale of a home against the Section 121 exclusion (see our guide to the home sale tax exclusion) all keep gains from triggering an avoidable surcharge two years later.
Front-load HSAs and manage the income floor
Health Savings Account contributions reduce AGI, and qualified HSA withdrawals never count toward MAGI, but you cannot contribute to an HSA once you enroll in Medicare. Maximizing the HSA in the years before enrollment builds a pool of money that can pay medical costs in retirement without adding to MAGI. Pairing this with charitable bunching through a donor-advised fund in high-income years rounds out the toolkit.
One caution applies to all of these: moving to tax-exempt municipal bonds does not help, because that interest is added back into IRMAA MAGI. The objective is lower MAGI, not merely lower taxable income.
How does the two-year look-back change retirement timing?
The two-year look-back means the income that sets your Medicare premiums is locked in before you ever pay them, so the planning has to happen ahead of time. Your 2026 IRMAA is based on your 2024 return; your 2027 IRMAA will be based on 2025. Social Security obtains the figure directly from the IRS and applies the brackets.
This timing creates a specific trap. A one-time income event in the two years before Medicare, a large capital gain, the sale of a business, or a home sale with gain above the exclusion, can inflate premiums for a future year even though your ongoing income is modest. Because these are not life-changing events, they cannot be appealed. The only defense is to see them coming and spread or time the income, which is the heart of proactive tax planning in the run-up to age 65.
Can you appeal IRMAA?
You can ask Social Security to reduce IRMAA, but only after a qualifying life-changing event, by filing Form SSA-44. The appeal lets Social Security use a more recent, lower-income year instead of the two-year-old return when a major life event has cut your income.
The Eight IRMAA Life-Changing Events (Form SSA-44)
Deadlines- Work stoppage, such as retirement
- Work reduction, such as cutting back to part time
- Marriage
- Divorce or annulment
- Death of a spouse
- Loss of pension income
- Loss of income-producing property through a disaster or other event beyond your control
- Employer settlement payment due to an employer bankruptcy or reorganization
A one-time capital gain, Roth conversion, or large RMD is not on this list and cannot be appealed. Those have to be planned for before the income is realized.
Two more mechanics are worth knowing. Part B IRMAA is usually withheld directly from your Social Security benefit, while Part D IRMAA is billed separately by Medicare even if a plan or employer pays your underlying drug premium. And the Social Security hold-harmless provision, which normally prevents a rising Part B premium from reducing your net benefit check, does not protect anyone subject to IRMAA, so a surcharge can actually lower your net Social Security deposit.
How do IRMAA, the NIIT, and Social Security taxation interact?
The same dollar of income can trigger several thresholds at once, which is why coordinated planning matters. A large Roth conversion or capital gain can simultaneously push you over an IRMAA cliff two years out, expose investment income to the 3.8% Net Investment Income Tax, and increase the share of your Social Security benefits that is taxable. None of these are visible on a single bracket schedule, so they have to be modeled together.
Because IRMAA is redetermined every year, the silver lining is that a spike is temporary: a single high-income year raises premiums for one year, and once income normalizes, IRMAA falls back two years later. The planning goal is to smooth income across years so you never bunch enough into one year to clear a cliff you could have stepped around. For retirees with significant traditional balances, that often means coordinating conversions, withdrawals, charitable giving, and gain realization as one multi-year plan rather than a series of isolated decisions.
Have questions about how IRMAA fits your retirement income plan? Contact TS CPA for a free consultation. We respond within the same day.