Updated for 2026. Yes — if your income exceeds certain thresholds, you pay an Income-Related Monthly Adjustment Amount (IRMAA) surcharge on top of standard Part B and Part D premiums. IRMAA is based on your tax return from 2 years ago and can add hundreds per month to your Medicare costs. Here's everything you need to know about how it works, the 2026 brackets, and how to reduce or appeal IRMAA.
What Is IRMAA and How Does It Work?
IRMAA stands for Income-Related Monthly Adjustment Amount. It's an extra charge added to your Medicare Part B and Part D premiums if your modified adjusted gross income (MAGI) exceeds specific thresholds. Social Security uses your tax return from 2 years prior — so your 2024 income determines your 2026 IRMAA.
IRMAA affects approximately 7% of Medicare beneficiaries. If you're in this group, the surcharge is automatically added to your Part B premium and deducted from Social Security.
2026 IRMAA Income Brackets
| Single Filer MAGI | Married Filing Jointly | Part B Monthly Premium | Part D Surcharge |
|---|---|---|---|
| ≤ $109,000 | ≤ $218,000 | $202.90 (standard) | $0 |
| $109,001–$137,000 | $218,001–$274,000 | $284.10 | $14.50 |
| $137,001–$171,000 | $274,001–$342,000 | $405.80 | $37.50 |
| $171,001–$205,000 | $342,001–$410,000 | $527.50 | $60.40 |
| $205,001–$500,000 | $410,001–$750,000 | $649.20 | $83.30 |
| > $500,000 | > $750,000 | $689.90 | $91.00 |
What Counts as Income for IRMAA?
IRMAA uses your Modified Adjusted Gross Income (MAGI), which includes:
- Wages, salaries, tips
- Social Security benefits (taxable portion)
- Pension and retirement account withdrawals (401k, IRA, 403b)
- Capital gains from selling investments, property, or business assets
- Rental income
- Interest and dividends
- Business income
- Tax-exempt interest (municipal bonds — yes, this counts!)
A common surprise: tax-exempt municipal bond interest is added back for IRMAA calculations even though it's not taxed. Similarly, a one-time event like selling a home or business can push you into a higher IRMAA bracket unexpectedly.
How to Appeal IRMAA: Life-Changing Events
If your income has decreased due to a qualifying life-changing event, you can request that Social Security use a more recent year's income by filing Form SSA-44.
Qualifying Life-Changing Events
- Marriage, divorce, or death of a spouse
- Work stoppage or reduction (retirement)
- Loss of income-producing property (natural disaster, involuntary)
- Loss of pension income
- Employer settlement payment (as a result of employer's closure or bankruptcy)
Important: Voluntary actions like selling investments or taking a large IRA withdrawal do NOT qualify for an appeal. The income change must be due to one of the specific life events listed above.
5 Strategies to Reduce IRMAA
- Roth conversions before 65: Convert traditional IRA funds to Roth IRA before Medicare enrollment. Roth withdrawals don't count toward MAGI.
- Manage capital gains timing: Spread large asset sales across multiple tax years to avoid spiking above IRMAA thresholds.
- Qualified Charitable Distributions: After 70½, donate directly from your IRA to charity (up to $105,000/year in 2026). QCDs reduce your taxable income without affecting your standard deduction.
- Tax-loss harvesting: Offset capital gains with investment losses to keep MAGI below thresholds.
- Work with a tax advisor: IRMAA planning should be part of your overall retirement tax strategy, ideally starting 2-3 years before Medicare eligibility.
Use our IRMAA Calculator to estimate your surcharges and see how different income scenarios affect your premiums.
Frequently Asked Questions
Concerned About IRMAA Surcharges?
We help clients navigate IRMAA appeals and plan strategies to minimize Medicare premium surcharges. Schedule a Medicare review to review your situation.
Get No-cost IRMAA GuidanceIRMAA brackets are set annually by CMS. Tax planning strategies should be discussed with a qualified tax professional. Dalton Insurance Agency provides Medicare guidance but does not provide tax advice. 2026 figures are based on current CMS announcements.
