Medicare IRMAA 2026: How Your Income Affects Your Medicare Premiums (And How to Fight It)

What Is IRMAA and How Does It Work?

IRMAA = Income-Related Monthly Adjustment Amount.

Medicare Part B and Part D premiums are income-adjusted. If your income is above certain thresholds, Medicare adds a surcharge to your regular premium.

How Medicare calculates it:

• Medicare looks at your Modified Adjusted Gross Income (MAGI) from 2 years prior
• For 2026 premiums, Medicare uses your 2024 tax return (MAGI)
• If your MAGI exceeds a threshold, you pay extra
• The surcharge increases in tiers—higher income = higher surcharge

The 2-year lookback is critical: If you do a large Roth conversion in 2024, it won't affect your 2024 Medicare premiums. But it will appear on your 2024 tax return, which Medicare uses to set your 2026 premiums (in 2 years). By the time you realize the impact, you've already locked in the surcharge.

2026 IRMAA Brackets and Surcharges

Part B (Medical Insurance)

Single Taxpayers:

Married Filing Jointly:

Part D (Prescription Drug Insurance)

Part D has similar income tiers with surcharges ranging from $12.70 to $76.90 per month.

Total IRMAA Impact: The Real Cost

A couple crossing into the $212,001–$266,000 MAGI bracket (for 2024 income, affecting 2026 premiums):

• Part B surcharge: +$74/month = +$888/year
• Part D surcharge: ~+$12.70/month = +$152/year
• Total: ~+$1,040/year

Cross into the next bracket ($266,001–$334,000):

• Part B surcharge: +$185/month = +$2,220/year
• Part D surcharge: ~$32/month = +$384/year
• Total: ~+$2,604/year

For someone at the top tier (MAGI above $400,000 MFJ):

• Part B surcharge: +$370/month = +$4,440/year
• Part D surcharge: ~$76.90/month = +$923/year
• Total: ~+$5,363/year

Over 20 years of retirement, an IRMAA surcharge can cost $50,000+.

What Counts as MAGI for IRMAA?

MAGI for IRMAA purposes includes:

• Wages and salary
• Self-employment income
• Taxable interest and dividends
• Capital gains (long-term and short-term)
• Qualified dividends
• Distributions from traditional IRAs and 401(k)s (including RMDs)
• Roth conversions (the full amount is taxable income)
• Rental income and other business income
• Foreign earned income
• Certain other sources

What does NOT count:

• Roth IRA distributions (if qualified)
• Return of basis / principal in non-qualified accounts
• Certain tax-exempt interest (municipal bonds)
• Social Security benefits (they're added back separately)

The Roth Conversion Trap

This is where many retirees get caught.

Scenario: Donald, age 65, first year on Medicare

• 2024 salary: $120,000 (still working part-time)
• 2024 Roth conversion: $100,000
• 2024 MAGI: $220,000
• 2026 IRMAA calculation: 2024 MAGI = $220,000 (single)
• This pushes him into the $200,000+ tier for 2026 premiums
• 2026 Part B surcharge: +$370/month = +$4,440/year

Donald converted for tax efficiency, but he didn't coordinate with his IRMAA impact. He's now paying $4,440/year more for Medicare.

The cost of the conversion (which he thought was 24% federal tax, ~$24,000) actually includes the hidden IRMAA cost: $370/month × 12 = $4,440/year for however many years he's on Medicare.

Total real cost of that $100,000 conversion: $24,000 (federal tax) + $4,440+ (IRMAA surcharge) = $28,440+, or 28.4% effective cost.

How to Avoid or Minimize IRMAA Impact

Strategy 1: Plan Conversions Below IRMAA Thresholds

If you're approaching Medicare age and considering Roth conversions, target MAGI below the surcharge threshold.

For a single person, staying under $106,000 MAGI avoids all surcharges. For a couple, stay under $212,000.

This means coordinating Roth conversions, RMDs, Social Security claiming, and capital gains realization to hit a target MAGI.

Strategy 2: Use Qualified Charitable Distributions (QCDs) Instead of RMDs

A QCD reduces your AGI (part of MAGI calculation) without triggering the full income that an RMD does.

If your RMD is $40,000 and you do a QCD of $40,000 instead, your MAGI drops by $40,000—potentially moving you out of a surcharge tier.

Strategy 3: Tax-Loss Harvesting to Offset Gains

In years where you're planning large income events (Roth conversion, RMD, capital gains realization), harvest tax losses from underperforming positions to offset some of the income.

A $50,000 Roth conversion offset by $30,000 in harvested losses = $20,000 net MAGI increase (vs. $50,000).

Strategy 4: Delay Social Security Claiming

Delaying Social Security (up to age 70) reduces your annual MAGI, potentially keeping you below IRMAA thresholds longer.

If delaying SS allows you to stay below the $212,000 threshold (MFJ) for 5 more years, that's 5 years × $4,440 = $22,200 in IRMAA surcharges avoided. The delay in SS benefits might only "cost" you $10,000 (foregone benefits), making the trade worthwhile.

Strategy 5: Income Splitting for Married Couples

For married couples, consider whose name income falls under. Though most retirees file jointly, some planning around who receives pension income, who manages investments, etc., can help (though this is limited because joint filing aggregates income).

IRMAA Appeals: The SSA Form SSA-44

If you had a major life change—retirement, death of spouse, loss of income-producing property—you can appeal your IRMAA determination.

Life-change events that qualify for appeals:

• Work reduction / retirement
• Death of spouse
• Divorce
• Loss of income-producing property (house fire, foreclosure, etc.)
• Reduction in business income
• Correction of taxes or benefit amount

Important: A Roth conversion is NOT a life-change event that qualifies for appeal. But retirement (significant income drop) is.

How to appeal:

1. Call Social Security at 1-800-772-1213
2. Request Form SSA-44 (Request for Reconsideration of Medicare Premium)
3. Explain the life change and provide documentation (termination letter, property loss proof, etc.)
4. Submit within 60 days of receiving your IRMAA notice

If approved, SSA can adjust your MAGI using current-year income (instead of 2-year-old income) if you've had a documented income drop.

Real Example: Monica's Medicare Shock

Facts:

• Age 66, enrolled in Medicare
• Retired in 2024 with substantial savings
• 2024 income: $250,000 (final year of work: $180,000 salary + $70,000 Roth conversion)
• 2026 projected income: $28,000 (pension only, no conversions)

Surprise: Monica's 2026 Medicare premiums are based on her 2024 MAGI of $250,000 (single).

She enters the highest IRMAA bracket: $200,000+.

Part B surcharge: +$370/month for all of 2026 (and likely 2027, since 2025 income determines 2027 premiums).

Monica pays ~$4,440 extra in 2026, even though her 2026 income is only $28,000.

Appeal: Monica can file SSA-44 showing her 2026 income is $28,000 (significant retirement income drop). If approved, SSA uses 2026 income instead, and she pays no surcharge for 2026 (and potentially 2027 as well).

The key: Monica should have planned her conversion timeline to avoid doing the full $70,000 conversion in 2024. She could have done $50,000 in 2024 and $20,000 in 2025 (after retirement, when her other income was lower).

The 2026 Planning Mindset

If you're approaching Medicare age:

1. Know your IRMAA thresholds: $106,000 (single) or $212,000 (MFJ) = no surcharge
2. Project your MAGI: Salary, pension, RMDs, conversions, capital gains—add them up
3. If you're near a threshold, consider tax planning: QCDs, tax-loss harvesting, conversion timing
4. Do Roth conversions before age 65 if possible: Conversions done before Medicare enrollment don't affect your first 3 years of IRMAA (2026–2028 premiums for a 2023 retiree use 2021–2023 income)
5. If you're already in a surcharge tier, consider filing an SSA-44 appeal if you've had a major income drop (retirement, death of spouse, etc.)

The couples who avoid IRMAA surprises are the ones who coordinate Roth conversions, RMDs, charitable giving, and Social Security claiming with their Medicare enrollment date and their 2-year MAGI lookback.