Most people on Medicare pay the standard monthly premium for Part B and whatever their chosen plan charges for Part D drug coverage. But if your income is above certain thresholds, you will see an extra charge called the Income-Related Monthly Adjustment Amount, better known as IRMAA. It surprises many new retirees because it is based on a tax return from two years earlier, often a year when they were still working. This guide explains how IRMAA works, how it is calculated, and what you can do if you think the surcharge is wrong or no longer reflects your income.
What IRMAA is
IRMAA is an additional amount added to your Medicare Part B premium and your Part D premium when your modified adjusted gross income exceeds set thresholds. Congress created the Part B surcharge in the Medicare Modernization Act of 2003, and it took effect in 2007. The Part D surcharge followed in 2011 under the Affordable Care Act.
The Social Security Administration (SSA) determines whether you owe IRMAA, using information the IRS provides. The Centers for Medicare & Medicaid Services (CMS) sets the dollar amounts each year. For 2026, the standard Part B premium is $202.90 a month, and the IRMAA tiers add to that amount in steps.
Who pays it
Only beneficiaries whose income exceeds the first threshold pay IRMAA. CMS has noted that a small share of Medicare beneficiaries, historically around 7% to 8% of Part B enrollees, pay the income-related amount. If your income is below the threshold, you pay only the standard premium.
How IRMAA is calculated
The income measure
SSA uses your modified adjusted gross income (MAGI) for IRMAA purposes. This is your adjusted gross income from Form 1040 plus any tax-exempt interest income. That last piece catches many people off guard: interest from municipal bonds, though federally tax-free, counts toward IRMAA.
The two-year look-back
Your 2026 IRMAA is generally based on your 2024 tax return. SSA uses the most recent return the IRS provides, which is usually from two years prior. If that return is not available, SSA may use the return from three years prior and adjust later once the newer return is filed.
This lag means a big income year, such as the year you sold a business, exercised stock options, or received a large severance payment, can lead to higher Medicare premiums two years later, even if your income has since dropped.
Brackets and filing status
IRMAA uses a tiered structure with several income brackets. Thresholds differ for single filers, married couples filing jointly, and married individuals filing separately who lived with their spouse during the year. Married-filing-separately filers face the steepest schedule, with fewer tiers and higher surcharges starting at a relatively low income level.
Because the brackets are cliffs rather than gradual phase-ins, going just $1 over a threshold triggers the full surcharge for that tier. Thresholds are indexed to inflation, so check the current year’s figures on Medicare.gov or in the notice SSA mails you.
Part D IRMAA
The Part D surcharge is a fixed dollar amount added on top of whatever premium your drug plan charges. It is collected by the government, not the plan. If your Social Security benefits are not large enough to have it withheld, you will receive a bill directly from Medicare. Even people with a $0 premium Part D plan or a Medicare Advantage plan with drug coverage owe the Part D IRMAA if their income is above the threshold.
How you are notified
SSA sends an initial determination letter, usually in late fall, explaining the IRMAA you will owe for the coming year, the tax year it used, and the income amount it relied on. The letter also explains your right to request a new decision or file an appeal. Keep this letter, because it contains the information you need if you want to challenge the determination.
If you receive Social Security retirement benefits, Part B and Part D IRMAA are usually deducted from your monthly payment. If you have not started benefits, Medicare bills you directly, typically quarterly for Part B.
Requesting a reduction for a life-changing event
The most common way to lower IRMAA is to show that your income has dropped because of a qualifying life-changing event. SSA recognizes these events:
- Marriage
- Divorce or annulment
- Death of a spouse
- Work stoppage or reduction in work hours
- Loss of income-producing property due to a disaster or event beyond your control
- Loss or reduction of certain kinds of pension income
- Receipt of an employer settlement payment due to an employer’s bankruptcy or reorganization
Retirement is the event that applies to most people. If you stopped working in 2025, for example, your 2024 income may overstate your current earnings.
Using Form SSA-44
To request a new determination, you complete Form SSA-44, Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event. On the form you:
- Identify the life-changing event and the date it happened.
- Report the reduction in income, including your estimated MAGI for the current year.
- Attach documentation, such as a letter from your employer confirming your retirement date, a death certificate, or a divorce decree.
You can submit the form by mail, in person at a Social Security office, or by phone appointment. If SSA approves your request, it will use the more recent or estimated income and adjust your premiums. If you overpaid, the excess is refunded or credited.
When the data is simply wrong
If the IRS data SSA used is incorrect, for example because you filed an amended return, you can request a new initial determination and provide a copy of the amended return and IRS acknowledgment. This is a different path from a life-changing event, but it uses the same goal: getting SSA to use accurate income.
Formal appeals
If SSA denies your request, you can file a request for reconsideration using Form SSA-561, generally within 60 days of the decision. Beyond that, the process follows the standard SSA appeal levels, including a hearing before an administrative law judge.
Planning strategies to manage IRMAA
Because IRMAA is based on income, tax planning can influence it. These are general strategies to discuss with a tax professional:
Watch large one-time income events
Spreading capital gains across several tax years, timing the sale of real estate, or staging Roth conversions can keep income below a bracket threshold. A Roth conversion increases MAGI in the year it occurs but can reduce taxable income later.
Use qualified charitable distributions
If you are 70½ or older, a qualified charitable distribution (QCD) lets you send money directly from an IRA to a charity. The amount is excluded from your income, unlike a regular withdrawal, which can help keep MAGI below a threshold.
Consider the source of withdrawals
Withdrawals from Roth IRAs and certain health savings account distributions for qualified medical expenses do not count toward MAGI. Balancing withdrawals between taxable and non-taxable accounts can help.
Remember the two-year lag
Any planning you do now affects premiums two years from now. If you are approaching 63, your income that year will shape your premiums at 65.
Related reading: Special Enrollment Periods: How to Get Health Coverage Outside Open Enrollment and Short-Term Health Insurance: How It Works, What It Excludes, and Safer Alternatives.
Frequently Asked Questions
Is IRMAA permanent once it applies?
No. SSA reviews your income each year. If your MAGI falls below the threshold in a later tax year, the surcharge drops off automatically when SSA receives that return. You can also request an earlier adjustment after a qualifying life-changing event.
Does IRMAA apply to Medicare Advantage enrollees?
Yes. Medicare Advantage members still pay the Part B premium, so they owe Part B IRMAA if their income qualifies. If their plan includes drug coverage, they also owe Part D IRMAA.
Does tax-exempt interest count for IRMAA?
Yes. For IRMAA purposes, MAGI includes your adjusted gross income plus tax-exempt interest, such as interest from municipal bonds.
What is the deadline to file Form SSA-44?
There is no strict deadline for a life-changing event request, but you should file as soon as you receive your IRMAA notice or experience the event so the reduction applies as early as possible.
Can a married couple both pay IRMAA?
Yes. If a married couple files jointly and their combined MAGI exceeds the threshold, each spouse enrolled in Medicare pays the surcharge on their own premiums.
This article is for general informational purposes only and is not legal, medical, tax, or financial advice. Rules vary by state and change over time; confirm details with the relevant agency or a licensed professional.
