IRMAA (the Income-Related Monthly Adjustment Amount) is an extra charge added to your Medicare Part B and Part D premiums when your income is above a set threshold. It is based on the tax return you filed two years ago, and it is recalculated every year. If your income later drops below the threshold, the surcharge can drop or go away the following January.
IRMAA is set by the federal government, not by your insurance company. The Social Security Administration (SSA) determines it using income data shared by the IRS, then notifies you by mail. This guide explains how IRMAA works in plain English, who it affects, how you are notified, and how it is paid.
Last updated: June 2026.
Key takeaways
- IRMAA is an income-based surcharge added to Medicare Part B and Part D premiums for higher-income beneficiaries.
- Social Security calculates it using your federal tax return from two years ago.
- It is recalculated every year; if your income drops, the surcharge can drop or end the following January.
- If your income dropped because of a qualifying life-changing event, you can appeal using Form SSA-44.
- Most people on Medicare do not pay IRMAA at all.
Most people on Medicare do not pay IRMAA. Only about 8% of beneficiaries owe it (Medicare Trustees Report).
2026 IRMAA quick reference
| Standard 2026 Part B premium | $202.90 per month |
| IRMAA starts above | $109,000 (single) or $218,000 (married filing jointly), based on 2024 income |
| Top tier (2026) | $689.90 per month Part B plus $91.00 Part D |
See the full tier-by-tier table in our Medicare IRMAA income brackets guide. IRMAA resets every year; see SSA.gov for current figures. (CMS and SSA, 2026.)
What Is IRMAA?
IRMAA stands for Income-Related Monthly Adjustment Amount. It is a surcharge that higher-income Medicare beneficiaries pay on top of the standard Part B and Part D premiums. The standard premiums are the same for most people on Medicare. IRMAA adds an additional monthly amount on top of those standard premiums when your income is above the threshold set each year by the federal government.
Two important points up front:
- IRMAA applies to both Part B (medical) and Part D (prescription drug coverage). The Part D surcharge applies whether you have a stand-alone Part D plan or a Medicare Advantage plan that includes drug coverage.
- IRMAA is recalculated every year. It is not a permanent penalty.
Who Does IRMAA Affect?
IRMAA only affects Medicare beneficiaries whose income is above the threshold set for the year. Most people on Medicare do not pay IRMAA. According to CMS, only a small share of beneficiaries owe a surcharge in any given year. The people most likely to be affected are:
- High-earning workers who enroll in Medicare at 65 while still working.
- Retirees with significant traditional IRA or 401(k) withdrawals.
- People with large one-time income events in the lookback year, such as a Roth conversion, the sale of a business, or a large capital gain.
- Households where one spouse is still working at a high income.
How Does Social Security Calculate IRMAA?
SSA uses your Modified Adjusted Gross Income, or MAGI, for IRMAA purposes. For IRMAA, MAGI is your Adjusted Gross Income (the AGI line on your federal tax return) plus any tax-exempt interest income (for example, interest from municipal bonds). The IRS shares this figure with SSA automatically.
What goes into MAGI for IRMAA includes:
- Wages and self-employment income.
- Traditional IRA, 401(k), 403(b), and pension withdrawals.
- The taxable portion of Social Security benefits.
- Interest, dividends, and capital gains.
- Rental and royalty income.
- Tax-exempt interest (this is the "modified" part of MAGI).
What does not count toward MAGI for IRMAA includes qualified Roth IRA and Roth 401(k) withdrawals, HSA distributions used for qualified medical expenses, return of basis from after-tax accounts, life insurance proceeds, and most gifts and inheritances.
The Two-Year Lookback
IRMAA is based on your most recent federal tax return on file with the IRS, which is almost always the return from two years prior to the premium year. So your IRMAA in any given year is based on income you earned two calendar years earlier.
This two-year lookback is important because it means your first Medicare premium at age 65 is set by the income you had at age 63, when you were probably still working. It also means a one-time income spike (such as a Roth conversion or the sale of a property) shows up on your Medicare bill two years later, not in the year it happened.
For a deeper look at the structure of the brackets and how married filing jointly and married filing separately are treated, see our Medicare IRMAA income brackets and the two-year lookback guide.
The Bracket Structure (Without Specific Dollar Figures)
IRMAA uses a tier or "bracket" system. The first tier is the standard premium with no surcharge. Each higher tier adds a larger surcharge to both Part B and Part D. The thresholds and surcharge amounts are updated each year by the federal government, so we do not list current-year dollar figures here. For the current year amounts, see Medicare.gov and SSA.gov.
What is important to understand about the structure:
- It is a cliff system. Crossing a threshold by even a small amount moves you into the next tier for the entire year. There is no gradual phase-in.
- It is per person. If both spouses are on Medicare, each one pays the surcharge based on the household income reported on the joint tax return.
- Married filing separately uses a different schedule. The brackets for married filing separately start much lower and have fewer tiers, so they can result in a much larger surcharge.
How You Are Notified
If you owe IRMAA, SSA mails you an Initial IRMAA Determination Notice, usually in November or December of the year before the surcharge takes effect. The letter shows:
- The MAGI figure SSA used and the tax year it came from.
- Your new Part B and Part D surcharge amounts.
- The effective date (January 1 of the next year).
- Your appeal rights and instructions for filing.
Keep this letter. You will need it if you decide to appeal. If you believe the income SSA used is no longer accurate because of a qualifying life-changing event, see our guide on how to appeal IRMAA using Form SSA-44.
How IRMAA Is Paid
How you pay IRMAA depends on whether you are already collecting Social Security:
- If you receive Social Security benefits, your higher Part B premium (including IRMAA) is automatically deducted from your monthly Social Security check. The Part D IRMAA is also deducted from Social Security, even though the base Part D premium is paid to your drug plan.
- If you are not yet collecting Social Security, Medicare bills you directly through a Medicare Premium Bill (CMS-500), typically every three months.
The Part D IRMAA is always paid to Medicare, not to your drug plan. Your drug plan still bills you for its own base premium separately.
Can IRMAA Be Reduced or Avoided?
Because IRMAA is based on your tax return from two years ago, the main levers to manage it are tax-planning levers in the years before and during Medicare. This is planning, not a guarantee, and the right choice depends on your full tax picture. We cover the most common strategies in our guide on how to reduce or avoid Medicare IRMAA.
If your income has already dropped because of a qualifying life-changing event, such as retirement, you do not have to wait two years for IRMAA to reset. You can ask SSA to use your current, lower income by filing Form SSA-44. See our guide to appealing IRMAA for the step-by-step.
Frequently Asked Questions
What is IRMAA in plain English?
IRMAA stands for Income-Related Monthly Adjustment Amount. It is an extra charge added to your Medicare Part B and Part D premiums when your income is above a threshold set by the federal government. It is recalculated every year.
Who decides if I owe IRMAA?
The Social Security Administration determines IRMAA using income data shared by the IRS from your tax return, typically the return from two years prior to the premium year.
Does IRMAA apply to both Part B and Part D?
Yes. If your income is above the threshold, IRMAA adds a surcharge to your Part B premium and a separate surcharge to your Part D premium. The Part D surcharge applies whether your drug coverage is a stand-alone Part D plan or built into a Medicare Advantage plan.
How will I know if I owe IRMAA?
SSA mails an Initial IRMAA Determination Notice, usually late in the year before it takes effect. The letter shows the income figure used, the tax year it came from, your new premium amounts, and your appeal rights.
How is IRMAA paid?
If you receive Social Security benefits, the higher premium is deducted from your monthly Social Security check. If you are not yet collecting Social Security, Medicare bills you directly through a Medicare Premium Bill.
Is IRMAA permanent?
No. IRMAA is recalculated each year. If your income drops below a threshold in a future year, your surcharge can decrease or end the following January.
Where can I find the current IRMAA amounts?
The current-year thresholds and surcharge amounts are published by Medicare and SSA. See Medicare.gov and SSA.gov.
References
- Medicare.gov: Medicare costs at a glance
- SSA.gov: Medicare premiums and IRMAA
- Form SSA-44: Life-Changing Event appeal
We are not connected with or endorsed by the federal government or the Medicare program.
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Written by Nick Depke, licensed independent insurance agent (NPN 19158595), Depke Insurance Agency, Omaha, NE.