In plain English
IRMAA is an income-related addition to Medicare Part B and Part D costs. Social Security generally uses modified adjusted gross income from the tax return two years before the premium year. Roth conversions, taxable retirement distributions, realized gains, and other income can affect that MAGI, so retirement planning should display the tax year and premium year together.
Check the 2026 first-tier arithmetic
The CMS 2026 Part B and Part D tables set the standard monthly Part B premium at $202.90. The first income-related tier applies above $109,000 through $137,000 for individual returns, or above $218,000 through $274,000 for joint returns. Married filing separately while living together has a different schedule.
| Item | One person per month | One person per year | Two enrollees per year |
|---|---|---|---|
| Extra Part B charge | $81.20 | $974.40 | $1,948.80 |
| Extra Part D charge | $14.50 | $174.00 | $348.00 |
| Combined surcharge only | $95.70 | $1,148.40 | $2,296.80 |
Put the tax year beside the premium year
IRMAA is not a separate income tax. It is an income-related monthly adjustment added to Medicare Part B and Part D costs for higher-income beneficiaries. The important timing detail is that Social Security generally looks back two years. A 2026 premium determination normally uses 2024 tax-return information, while income recognized in 2026 would generally appear in a 2028 premium determination.
That delay makes IRMAA easy to miss in a retirement projection. A useful planner should not merely show this year’s taxable income. It should map tax-year MAGI to the corresponding premium year, count how many household members are expected to be enrolled in Medicare then, and distinguish the base premium from the incremental IRMAA surcharge.
Planning takeawayA tax decision and its Medicare effect usually appear on different calendar lines.
Identify what is moving MAGI
For IRMAA, modified adjusted gross income generally starts with adjusted gross income and adds tax-exempt interest. Traditional IRA or 401(k) distributions, Roth conversions, pensions, wages, taxable interest, dividends, and realized capital gains can therefore matter. Qualified Roth distributions generally do not increase federal AGI, but every transaction must still meet the applicable qualification rules.
Social Security is subtler. Up to 85% of benefits can be included in taxable income; that does not mean the benefit is taxed at an 85% rate. Other income changes provisional income, which can cause more of the benefit to become taxable and then flow into AGI. A planner should model that interaction instead of marking the entire benefit either taxable or tax-free.
- Ordinary-income driversWages, pensions, pre-tax withdrawals, and Roth conversions can increase AGI.
- Investment driversInterest, dividends, and realized gains may affect MAGI even when no retirement account is tapped.
- Benefit interactionAdditional income can cause a larger portion of Social Security to enter taxable income.
Treat a threshold as a price, not an automatic stop sign
IRMAA uses income tiers. Crossing a tier can increase monthly Part B and Part D charges, which gives the threshold a cliff-like effect. But a good decision compares the incremental premium with the lifetime benefit of the action that caused it. Avoiding a modest surcharge may not justify skipping a conversion that substantially reduces later RMDs, survivor taxes, or higher-bracket income.
For 2026, the first tier begins above $109,000 for a single filer and above $218,000 for married filing jointly. A married couple with two Medicare enrollees just into that first tier faces about $2,297 of combined annual Part B and Part D surcharges, based on the published monthly additions. That is meaningful, but it is not automatically a $5,000 or $10,000 penalty and should not be described that way.
Know when current income may replace an old return
A two-year-old return may reflect income that no longer represents the household. Social Security provides Form SSA-44 for certain life-changing events, including work stoppage or work reduction, when a beneficiary asks for a lower IRMAA determination. Retirement can therefore be relevant, but eligibility, evidence, timing, and the exact event must be verified.
Use the Medicare timeline as an early-warning system. Flag years near a threshold, show the modeled income drivers, and preserve the difference between an estimate and a notice from Social Security. Before acting on conversions, gains, or an appeal, coordinate the retirement projection with an actual tax projection and current official instructions.
Common questions
Frequently asked questions
What is the IRMAA lookback period?
Social Security generally uses tax information from two years before the Medicare premium year. Exceptions and updated determinations can apply.
Does a Roth conversion affect IRMAA?
A taxable Roth conversion generally increases AGI and can affect IRMAA two years later. Compare the surcharge with the conversion’s broader lifetime effect.
Can retirement lower an IRMAA determination?
Work stoppage or reduction may qualify as a life-changing event for an SSA-44 request. Review the current form and evidence requirements; approval is not automatic.
Sources and further reading
Rules and program details can change. These primary and research sources are a starting point for checking current information.
- SSA’s Medicare premium explanationSocial Security Administration
- CMS 2026 Part B and Part D tablesCMS
- SSA-44Social Security Administration
- Tax inflation adjustments for tax year 2026Internal Revenue Service
