What is IRMAA?
The Income-Related Monthly Adjustment Amount (IRMAA) is a surcharge added to your standard Medicare Part B (medical insurance) and Medicare Part D (prescription drug coverage) premiums if your income is above a certain threshold.
Unlike standard Medicare premiums which are flat rates, IRMAA is progressive: the higher your income, the more you pay.
How the IRS and Medicare Determine Your IRMAA
Your IRMAA surcharge is calculated using your Modified Adjusted Gross Income (MAGI) from your federal tax return two years prior.
For example, your 2026 IRMAA surcharge is based on the MAGI you reported on your 2024 tax return. This two-year lag is because tax returns are not fully processed when the new Medicare year begins.
Standard Medicare Part B vs. IRMAA Levels
The standard Part B premium covers approximately 25% of the program’s costs, with the government covering the remaining 75%. If you trigger IRMAA, you are required to cover a larger portion of the program’s costs (from 35% up to 85%):
- Standard Level: Income under $106,000 (Single) or $212,000 (Joint). You pay only the standard base premium.
- Tier 1 Surcharge: Income between $106,000–$133,000 (Single) or $212,000–$266,000 (Joint).
- Highest Surcharge Tier: Income above $500,000 (Single) or $750,000 (Joint).
Note: Surcharge thresholds are adjusted annually for inflation.
What If Your Income Dropped? (Life-Changing Events)
Because IRMAA uses tax returns from two years ago, it might not reflect your current financial reality (especially if you recently retired or lost a spouse).
If you experience a Life-Changing Event that causes your income to drop, you can file a dispute using Form SSA-44 to request a reduction in your surcharge. Qualifying events include:
- Retirement or work reduction
- Loss of income-producing property
- Loss of pension income
- Marriage, divorce, or death of a spouse