If you're on Medicare—or about to enroll—there’s a little acronym that can have a big impact on your wallet: IRMAA. Short for Income-Related Monthly Adjustment Amount, IRMAA is an additional charge added to your Medicare Part B and Part D premiums if your income exceeds certain thresholds. As tax season approaches, it’s a good time to understand how IRMAA works, how it’s calculated, and what you can do to plan ahead.
What Is IRMAA?
IRMAA is not a penalty or a late fee. It’s an income-based surcharge that applies to Medicare beneficiaries who earn above a certain level. The idea is that individuals with higher incomes can afford to contribute more to the cost of their Medicare coverage.
If IRMAA applies to you, it will be added to your Part B premium (which covers doctor visits and outpatient services) and, if you have it, your Part D premium (for prescription drug coverage).
2026 IRMAA Thresholds
Your IRMAA amount is based on your modified adjusted gross income (MAGI) from two years prior—which means in 2026, the Social Security Administration (SSA) will look at your 2024 tax return. MAGI includes your adjusted gross income (AGI) plus tax-exempt interest income.
Here are the 2026 IRMAA thresholds (based on 2024 income):
- For individuals, IRMAA does not apply if your 2024 modified adjusted gross income (MAGI) is $109,000 or less. IRMAA does apply if your income is above $109,000.
- For married couples filing jointly, IRMAA does not apply if your 2024 MAGI is $218,000 or less. IRMAA does apply if your income is above $218,000.
The amount of IRMAA increases in tiers. The higher your MAGI, the more you may pay in additional premiums. These charges are automatically calculated and communicated by the SSA each year.
Why IRMAA Matters at Tax Time
Since IRMAA is based on your income from two years ago, your tax planning should include a forward-looking strategy—especially if you're approaching retirement or expect significant income changes.
For example, if you’re planning to retire in 2026, your 2025 income could trigger IRMAA surcharges in 2027. Even if your income drops after retirement, your Medicare premiums could remain high temporarily unless you take action. That’s why it pays to start thinking about IRMAA before you leave the workforce.
Tax Strategies to Reduce Future IRMAA Charges
Here are a few ways to plan ahead and potentially reduce your future IRMAA costs:
- Time capital gains and Roth conversions wisely: Large one-time income events—like selling a property or converting a traditional IRA to a Roth—can increase your MAGI. If possible, spread these over multiple years to stay under IRMAA thresholds.
- Delay Social Security: If you don’t need the income right away, delaying your Social Security benefits could reduce your MAGI during key years and help you avoid IRMAA.
- Coordinate with retirement withdrawals: Work with a financial advisor to plan your distributions from tax-deferred accounts in a way that manages your taxable income.
What If You’ve Already Retired or Your Income Has Dropped?
Let’s say your income has decreased since 2024 due to retirement, the loss of a spouse, or another life event. You may request a reduction in your IRMAA amount through the SSA's reconsideration process.
This is particularly useful if your current income is much lower than what’s shown on your 2024 tax return.
How the Reconsideration Process Works
If you think your IRMAA determination is based on outdated or incorrect income information, or if you've experienced a life-changing event, you can file Form SSA-44: Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event.
Qualifying life events include:
- Retirement or reduction in work hours
- Marriage or divorce
- Death of a spouse
- Loss of income-producing property
- Loss of pension income
- Settlement from an employer
You’ll need to provide documentation of the event and your reduced income. If approved, SSA may lower your IRMAA or remove it entirely for the current year.
To learn more or access the form, visit ssa.gov/medicare/lower-irmaa.
A Final Word on IRMAA and Planning Ahead
IRMAA is a tax-related surprise that many Medicare beneficiaries don’t expect, especially those transitioning into retirement, but it doesn’t have to catch you off guard. By understanding how IRMAA is calculated, staying below the income thresholds where possible, and knowing your appeal rights, you can keep your Medicare premiums manageable—and avoid paying more than necessary.
If you’re unsure whether IRMAA might apply to you, a retirement planner or financial advisor can help you develop a strategy to reduce future exposure. Planning ahead now can lead to meaningful savings later.
