How Does Medicare IRMAA Work? (2026)

One of the biggest retirement surprises isn’t taxes. It’s Medicare premiums.

Specifically, IRMAA.

It is worth understanding, because it is one of the few retirement costs you have real control over, and because almost nobody sees it coming the first time.

Here is the whole thing, start to finish.

What it actually is

IRMAA stands for Income-Related Monthly Adjustment Amount. It is a surcharge added to your Medicare Part B and Part D premiums once your income passes certain levels.

It is not a penalty and it is not a tax. Medicare subsidizes roughly 75% of the cost of Part B for most beneficiaries. As income rises above the IRMAA thresholds, that subsidy gradually shrinks. Depending on your income, you may pay premiums equal to about 35%, 50%, 65%, 80%, or 85% of the program’s cost.

You’re not being fined. You’re simply receiving a smaller government subsidy.

Medicare looks at a two-year-old tax return

This is the part that surprises people.

Your 2026 premium is based on your 2024 tax return. Your 2027 premium will be based on your 2025 return. The Social Security Administration uses the most recent tax return it has received from the IRS, which is generally two years back.

So the income that sets your premium is income you earned two years ago, in a year you can no longer change.

The year to manage IRMAA is two years before you pay it.

The 2026 numbers

These are per person, per month, based on 2024 modified adjusted gross income.

Single $109,000 or less. Joint $218,000 or less. Part B $202.90. No Part D surcharge.

Single $109,001 to $137,000. Joint $218,001 to $274,000. Part B $284.10. Part D plus $14.50.

Single $137,001 to $171,000. Joint $274,001 to $342,000. Part B $405.80. Part D plus $37.50.

Single $171,001 to $205,000. Joint $342,001 to $410,000. Part B $527.50. Part D plus $60.40.

Single $205,001 to $499,999. Joint $410,001 to $749,999. Part B $649.20. Part D plus $83.30.

Single $500,000 or more. Joint $750,000 or more. Part B $689.90. Part D plus $91.00.

The standard Part B premium rose from $185.00 in 2025 to $202.90 in 2026. The Part B deductible is $283.

The Part D surcharge is separate from whatever your drug plan charges. It goes to Medicare, not to your plan, and it applies even if your Medicare Advantage plan has a zero dollar premium.

It is a cliff, not a slope

Income tax brackets are gradual. Cross into a higher bracket and only the dollars above the line are taxed at the higher rate.

IRMAA does not work that way. Cross a threshold by one dollar and the full surcharge applies to every month of that year.

A single filer with 2024 income of exactly $109,000 pays $202.90 a month in 2026. At $109,001, the premium is $284.10 plus $14.50 for Part D. That is $95.70 more per month, or about $1,148 for the year. For a married couple where both are on Medicare, the surcharge applies to each of them, so roughly $2,297 for one dollar of income.

One extra dollar of income can reprice an entire year of Medicare premiums—and if both spouses are enrolled, it does it twice.

What counts, and what does not

For IRMAA, modified adjusted gross income is your adjusted gross income plus tax-exempt interest.

Things that count: wages, pensions, the taxable part of Social Security, IRA and 401(k) withdrawals, required distributions, capital gains, dividends, taxable interest, rental income, and every dollar of a Roth conversion.

Things that do not count: qualified Roth withdrawals, qualified HSA withdrawals, and the return of your own basis.

Two details catch people almost every time.

The first is municipal bond interest. It is exempt from federal income tax, and it is added right back for IRMAA. If you bought munis specifically to keep income down, they are doing that job on your tax return and not doing it at all on your Medicare premium.

The second is that deductions do not help. Your standard deduction, your itemized deductions, the extra deduction for being over 65, and the new senior deduction from the 2025 tax law all reduce taxable income. None of them reduce adjusted gross income, which means none of them move the number Medicare reads. You can lower your tax bill and leave your premium exactly where it was.

Roth conversions

Every converted dollar is ordinary income in the year you convert, and it flows straight into the MAGI that Medicare will look at two years later.

That does not make conversions a bad idea. It makes the cost of one larger than the tax bill alone.

The full cost of a conversion in any given year is the income tax on the converted amount, plus any IRMAA tier you cross two years out, plus any phase-out of the senior deduction that the added income triggers. Most people are looking only at the first number.

This is the tradeoff most retirees underestimate. Converting raises income now, which can raise premiums two years from now. Not converting leaves a larger pretax balance, which grows into larger required distributions later, which can raise premiums for the rest of your life and for your surviving spouse after that. Both directions have a cost. The question is which one you would rather pay and when.

Two practical notes.

Conversions are usually sized up to a threshold rather than through one. Landing just past a line is the expensive outcome, and it is worth leaving room, because a late mutual fund distribution or more interest income than you expected can move you across a line you thought you had cleared.

And the timing starts earlier than people expect. Because Medicare reads the return from two years back, the income on your return at age 63 helps set the premium you pay at 65. Conversion planning and Medicare planning start overlapping well before you enroll.

Required distributions

Required distributions begin at 73 or 75 depending on your birth year, and they are the most common reason a retiree who never paid IRMAA suddenly starts paying it. They are not optional and they are not adjustable. Unlike Roth conversions, you don’t get to choose whether they happen.

If you give to charity, a qualified charitable distribution after age 70 and a half can satisfy part or all of a required distribution without adding a dollar to adjusted gross income. It is one of the few tools that reduces the Medicare number and the tax number at the same time.

What happens when one spouse dies

This is the part I get the most questions about, and it deserves its own section.

Except at the very top tier, the single-filer thresholds are exactly half the joint thresholds. $109,000 against $218,000. $137,000 against $274,000. $205,000 against $410,000.

Income does not fall by half when a spouse dies. Required distributions continue from retirement accounts that generally haven’t shrunk just because one spouse passed away. The pension usually continues, often at a reduced survivor amount. The larger of the two Social Security benefits continues and the smaller one stops.

So a couple comfortably below the joint threshold can become a survivor sitting above the single one, on less money than the household had before.

The timing adds a second layer. In the year of death the survivor can generally still file jointly. The first return filed as a single filer is usually the year after, and Medicare will not read that return for another two years. Premiums in between are still being priced off the old joint returns. That delay can be useful planning time or an unpleasant surprise, depending entirely on whether anyone is watching for it.

Form SSA-44, and one caution about it

An IRMAA determination is not always final. If a qualifying life-changing event reduced your income, Form SSA-44 asks Social Security to use a more recent or estimated year instead of the two-year-old return.

Eight events qualify: marriage, divorce or annulment, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, and an employer settlement payment.

Retirement itself is the most common one. A salary from your last working year sets a premium for a year in which you have no salary. That is exactly what the form is for.

Note what does not qualify. Selling a house, realizing capital gains, a large required distribution, and a Roth conversion are not life-changing events. Those you wait out.

Here is the caution that rarely gets mentioned. For a surviving spouse, the form only helps if your estimated current-year income, measured against the single thresholds, lands you in a lower tier than what Social Security already calculated. If your income did not fall much, filing can substitute a number that produces the same tier or a higher one.

Before filing, compare the IRMAA tier using your current-year estimated income with the tier Social Security already assigned. Filing doesn’t automatically lower your premium.

A few other things people ask

IRMAA is not permanent. It is redetermined every year against a new return. When income comes down, the surcharge follows about two years later.

The hold harmless provision, which prevents a Part B increase from reducing someone's Social Security check, never applies to anyone paying IRMAA. Higher-income households absorb the full premium increase every year.

Married filing separately, for spouses who lived together during the year, has no middle tiers at all. Above $109,000 it jumps straight to the second-highest level. Filing status belongs in the conversation.

The four middle thresholds are indexed to inflation each year. The top tier has stayed at $500,000 and $750,000. A threshold you cleared comfortably one year can move, and so can your income.

The short version

If you remember only four things, remember these:

• It’s based on a tax return from two years earlier.

• It’s a cliff, not a gradual phase-in.

• It’s calculated using a form of income that many deductions don’t reduce.

• It applies separately to each spouse.

Which means the year to manage IRMAA isn’t the year you pay it. It’s two years before.

**These are the 2026 figures. Medicare announces new IRMAA thresholds and premiums each fall for the following year. This is general education rather than advice about your situation, and the right answer depends on your own return.