What IRMAA is
IRMAA = Income-Related Monthly Adjustment Amount. It's an income-based surcharge added to your Part B AND Part D premiums if your modified adjusted gross income (MAGI) exceeds the threshold.
It's not a tax. It's a Medicare premium calculation. Social Security adds the surcharge to your existing premium and either deducts it from your SS benefit or sends you a bill.
IRMAA is based on the IRS's 2-year-lookback. Your 2026 IRMAA is based on your 2024 tax return. So a year with abnormally high income — selling a house, big Roth conversion, RSU vesting — can spike your Medicare premiums two years later.
2026 IRMAA brackets
Single MAGI / Married-jointly MAGI / Part B add-on / Part D add-on
$106K / $212K — Tier 1 — $74.00/mo Part B + $13.70/mo Part D
$133K / $266K — Tier 2 — $185.00/mo Part B + $35.30/mo Part D
$167K / $334K — Tier 3 — $295.90/mo Part B + $57.00/mo Part D
$200K / $400K — Tier 4 — $406.90/mo Part B + $78.60/mo Part D
$500K / $750K — Tier 5 — $443.90/mo Part B + $85.80/mo Part D
These add to the standard Part B premium ($202.90/mo). At Tier 5, total Part B is $646.80/mo. Plus your Part D premium plus the IRMAA add-on.
MFS (Married Filing Separately) has its own bracket structure with much lower thresholds.
Why the cliff matters
IRMAA is a cliff structure, not a slope. One dollar over a threshold puts you in the next tier and adds $1,000-$5,000+ per year to your Medicare costs (per spouse).
Example: A married couple with MAGI of $211,999 pays the standard Medicare premium. At MAGI of $212,001, they each pay $74/mo extra Part B + $13.70/mo extra Part D. That's $2,104.80/year in additional Medicare costs for being $2 over the line.
This is why end-of-year tax planning matters for retirees. Pulling forward income or pushing it back by even a small amount can save thousands.
What counts as MAGI
For IRMAA, MAGI = adjusted gross income (AGI) + tax-exempt municipal bond interest. Most other 'modified' calculations don't apply here.
Includes: wages, pension income, Social Security benefits (taxable portion), traditional IRA distributions, RMDs, Roth conversions, capital gains, dividends, interest, business income.
Excludes: Roth IRA distributions (qualified), HSA distributions for medical, life insurance proceeds, gifts, inheritances, return of capital.
The appeal process — when it works
If your income dropped after the lookback year due to a 'life-changing event,' you can appeal IRMAA using Form SSA-44. Approved life-changing events:
Marriage / divorce / death of spouse
Work stoppage or work reduction (retirement counts)
Loss of income from income-producing property (e.g., rental property destroyed)
Loss of pension income
Settlement payment from employer due to bankruptcy or termination
If approved, SSA recalculates your IRMAA based on your current/expected income, not the 2-year-old return. Most retirees who go from working high income to lower retirement income benefit from this appeal.
How to file the appeal
Download Form SSA-44 from ssa.gov. Fill out the life-changing event section. Estimate your current-year MAGI. Provide documentation (termination letter, divorce decree, etc.).
Submit to your local Social Security office (in person, mail, or fax). Processing takes 30-90 days.
If approved, your IRMAA is adjusted for the current year. You may also get a refund for premiums you've already paid at the higher rate.
Don't wait. The sooner you file after the qualifying event, the sooner the adjustment kicks in.
Strategies to manage IRMAA
1. Time large income events: a Roth conversion in November vs. January matters two years later for IRMAA.
2. Bunch deductions to reduce MAGI: charitable contributions, deductible medical expenses, etc.
3. Use Roth withdrawals strategically: Roth distributions don't add to MAGI. In a year with other high income, drawing from Roth instead of traditional IRA can keep you under a threshold.
4. Manage capital gains: spread realizations across years. Use loss harvesting to offset.
5. Watch the SS taxable portion: more income = more SS taxable, which compounds the MAGI increase.
6. Donor-advised funds: front-load charitable giving in a high-income year for a deduction.