IRMAA (Income-Related Monthly Adjustment Amount) is calculated using your tax return from two years prior. The Social Security Administration pulls your income data directly from the IRS, compares it against a set of income brackets based on your filing status, and adds a surcharge to your Medicare Part B and Part D premiums if you’re above the threshold. For 2026, the surcharge kicks in at $109,000 for single filers and $218,000 for married couples filing jointly.
The Income Figure That Drives IRMAA
IRMAA isn’t based on your wages alone. It uses a figure called Modified Adjusted Gross Income, or MAGI, which is your adjusted gross income (line 11 on IRS Form 1040) plus any tax-exempt interest income (line 2a). That second piece catches a lot of people off guard. If you hold municipal bonds or other tax-free investments, that income still counts toward your IRMAA calculation even though it doesn’t show up in your taxable income.
This means your MAGI includes wages, Social Security benefits (the taxable portion), pensions, capital gains, rental income, IRA distributions, and tax-exempt interest. A one-time event like selling a property or converting a traditional IRA to a Roth can push your MAGI into a higher bracket for that year.
The Two-Year Lookback Rule
SSA uses your tax return from two years before the current premium year. For 2026 premiums, SSA looks at your 2024 tax return. If your 2024 return isn’t available yet, they’ll use 2023 instead. This lag matters because your income situation may have changed significantly since then, especially if you’ve recently retired. There is a way to address that, covered below.
2026 Income Brackets for Part B
The standard Part B premium for 2026 is $202.90 per month. If your MAGI exceeds the threshold for your filing status, you pay more. The surcharge is structured in tiers, and each tier replaces the standard premium with a higher fixed amount.
Single, Head of Household, or Qualifying Surviving Spouse
- $109,000 or less: $202.90 (standard premium)
- $109,001 to $137,000: $284.10
- $137,001 to $171,000: $405.80
- $171,001 to $205,000: $527.50
- $205,001 to $499,999: $649.20
- $500,000 or more: $689.90
Married Filing Jointly
- $218,000 or less: $202.90 (standard premium)
- $218,001 to $274,000: $284.10
- $274,001 to $342,000: $405.80
- $342,001 to $410,000: $527.50
- $410,001 to $749,999: $649.20
- $750,000 or more: $689.90
Married Filing Separately
If you’re married, lived with your spouse at any point during the tax year, and filed separately, the brackets are much less forgiving. You jump from the standard premium directly to the second-highest tier with no intermediate steps:
- $109,000 or less: $202.90 (standard premium)
- $109,001 to $390,999: $649.20
- $391,000 or more: $689.90
SSA assumes married-filing-separately filers lived together during the tax year unless you specifically demonstrate otherwise. If you and your spouse lived apart for the entire year, you can contact SSA to have your IRMAA recalculated using the single-filer brackets.
Part D Surcharges Work the Same Way
IRMAA also applies to Medicare Part D (prescription drug coverage), using the same income brackets and the same two-year lookback. Instead of replacing your premium, the Part D surcharge is an additional amount on top of whatever your drug plan charges. For 2026, the surcharges range from $14.50 to $91.00 per month depending on your income tier.
For a single filer with MAGI between $109,001 and $137,000, the Part D surcharge is $14.50 per month. At the highest bracket ($500,000 or more for single filers, $750,000 or more for joint filers), it’s $91.00. All IRMAA surcharges for both Part B and Part D are paid directly to Medicare. If you receive Social Security benefits, the surcharges are automatically deducted from your monthly payment.
How SSA Determines and Notifies You
Each year, SSA sends the Social Security numbers of Medicare beneficiaries to the IRS, which returns income data. If your MAGI is above the threshold, you’ll receive a notice. The exact type of notice depends on your situation.
If you’re already enrolled in Medicare, you’ll get a targeted cost-of-living adjustment (COLA) notice explaining your IRMAA amount for the upcoming year. This notice is an official determination that comes with appeal rights. If you’re newly enrolling in Medicare or just turning 65, SSA first sends a pre-determination notice giving you 10 days to respond if you believe the information is wrong. A formal determination notice follows at least 20 days later.
Life-Changing Events That Qualify for a Reduction
Because IRMAA relies on two-year-old tax data, it can overstate your current financial picture. If your income has dropped significantly due to a qualifying life event, you can ask SSA to use a more recent or projected income instead. The eight recognized life-changing events are:
- Death of a spouse
- Marriage
- Divorce or annulment
- Work reduction
- Work stoppage
- Loss of income-producing property (due to disaster, fraud, or similar causes)
- Loss of an employer pension
- Receipt of a settlement payment from a current or former employer
To request a new determination, you file Form SSA-44 with supporting documentation showing the event and its impact on your income. The key requirement is that the event caused your MAGI to drop enough to move you into a lower bracket. Retiring, for instance, often qualifies under “work stoppage” if your post-retirement income is substantially lower than what your two-year-old tax return shows.
How to Appeal an IRMAA Determination
Beyond life-changing events, you can formally appeal your IRMAA determination within 60 days of receiving the notice. (SSA considers you to have received the notice five days after its date unless you can show otherwise.) Grounds for appeal include situations where SSA used your older tax return and you now have a more recent one available, where you filed an amended return that the IRS accepted, or where the IRS provided incorrect data to SSA.
You’ll need to provide documentation supporting your case, such as a copy of the correct tax return or a letter from the IRS acknowledging a data error. The appeal is a request for reconsideration, and SSA will review the evidence and issue a new determination.
Why a Single Dollar Can Cost You Thousands
IRMAA operates as a cliff system, not a gradual scale. If your MAGI lands one dollar above a bracket threshold, you pay the full surcharge for that tier. For a single filer in 2026, crossing from $109,000 to $109,001 increases your Part B premium from $202.90 to $284.10 per month, an extra $974.40 per year. Add in the Part D surcharge of $14.50 monthly, and you’re looking at roughly $1,148 more annually for that single dollar of income.
This is why managing MAGI in the years leading up to Medicare, and during enrollment, can make a real difference. Strategies like timing Roth conversions, managing capital gains, or spacing out large asset sales across tax years can help keep your MAGI below a threshold. The two-year lookback means the planning window is well before your premiums are set.