IRMAA (Income-Related Monthly Adjustment Amount) surcharges increase your Medicare Part B and D premiums based on your modified adjusted gross income from two years prior. In 2026, individuals with MAGI above $106,000 (or $212,000 for couples) pay higher premiums. Strategic income management can help you stay below these thresholds.
Medicare uses a two-year lookback to determine your premiums: your 2026 Part B and D premiums are based on your 2024 tax return. This lag means a large income event, a business sale, a Roth conversion, a required minimum distribution, can unexpectedly spike your Medicare costs two years later. The top IRMAA bracket can add more than $400/month per person to your premiums.
For 2026, the IRMAA thresholds for individuals are: $106,000 (tier 1 surcharge), $133,000 (tier 2), $167,000 (tier 3), $200,000 (tier 4), and $500,000+ (tier 5). Married couples filing jointly double these thresholds. Each tier adds a fixed monthly surcharge to your Part B and Part D premiums. The surcharges apply to both spouses if both are on Medicare.
The most effective IRMAA management strategy is income planning in the years before Medicare enrollment. Roth conversions done before age 63 (two years before most people enroll at 65) don't affect IRMAA. Large conversions after 63 should be calibrated to stay within a target bracket. Similarly, business sale proceeds, IRA distributions, and capital gains can all be timed and sized to avoid crossing into the next IRMAA tier.
If you do trigger a surcharge due to a one-time income event (business sale, inheritance, retirement), you can appeal using Form SSA-44. The SSA will consider a life-changing event, including retirement or reduction in income, and may use a more recent year's income to recalculate your premium. This appeal process is underused and worth filing if your income drops significantly from the lookback year.
Key facts
- 2026 IRMAA threshold: individual MAGI above $106,000 (married above $212,000) triggers the first surcharge tier
- Top IRMAA bracket: individual MAGI above $500,000 adds ~$419/month per person to Part B premiums alone
- IRMAA uses a two-year lookback: 2026 premiums are based on 2024 MAGI
- Roth conversions increase MAGI and can trigger IRMAA, conversions before age 63 avoid the Medicare premium impact
- SSA Form SSA-44: allows appeal of IRMAA surcharges for life-changing events, including retirement
- IRMAA applies separately to each spouse, a couple can face two sets of surcharges
How do Roth conversions trigger IRMAA?
Roth conversions add to your MAGI in the year of conversion. If that year falls within the two-year IRMAA lookback window, the additional income can push you into a higher IRMAA bracket, increasing your Medicare premiums two years later. For example, a large conversion at age 65 increases your MAGI in 2026, which determines your premiums in 2028. We model conversions to stay within target brackets and avoid crossing IRMAA thresholds unnecessarily.
What counts as income for IRMAA purposes?
IRMAA is based on Modified Adjusted Gross Income (MAGI), which includes: wages, IRA and 401k withdrawals, Roth conversions, capital gains (including business sale proceeds), interest, dividends, rental income, and the taxable portion of Social Security. Roth IRA distributions aren't included, which is one of the reasons Roth conversions are valuable despite the short-term MAGI increase.