Does My Income Affect My Medicare Premiums? IRMAA Explained

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

Is IRMAA permanent?

No. IRMAA is recalculated every year based on your tax return from 2 years prior. If your income drops, your IRMAA will decrease or disappear the following year. It’s not a permanent penalty like the Part B late enrollment penalty.

I sold my house last year and my income spiked. Will I pay IRMAA?

Likely yes, two years from now. The capital gains from your home sale (above the $250K/$500K exclusion) will be included in your MAGI. Unfortunately, selling a home is not a qualifying life-changing event for an IRMAA appeal. Plan ahead by discussing timing with your tax advisor.

Does IRMAA apply to Medicare Advantage premiums?

IRMAA applies to your Part B premium, which you pay regardless of whether you have Original Medicare or Medicare Advantage. If your MA plan includes Part D, the Part D IRMAA surcharge also applies. The surcharge is collected by Social Security, not your MA plan.

My spouse died and our income dropped. Can I appeal?

Yes. Death of a spouse is a qualifying life-changing event. File Form SSA-44 with Social Security along with documentation showing your reduced income. You can request they use the current year’s estimated income instead of your joint return from 2 years ago.