What Is IRMAA, and How Do You Avoid the Medicare Surcharge?
By Jesse Stacy MTAX, CFP®, EA, | JCS Retirement Tax Advisors, Columbus, OH | Last reviewed July 2026
IRMAA is an extra amount you pay on top of your Medicare Part B and Part D premiums when your income is above a certain line. Social Security looks at your tax return from two years ago, and if your income that year was high enough, your premium goes up. That is the whole idea in one breath. Now here is why it catches so many people in their first years of retirement, and what you can actually do about it.
What IRMAA Actually Is
IRMAA stands for Income-Related Monthly Adjustment Amount. Most people just call it the Medicare surcharge. Everyone on Medicare pays the same base Part B premium, which is $202.90 a month in 2026. If your income is over the threshold, you pay that base amount plus a surcharge, and you pay a smaller surcharge on your Part D drug coverage too.
The part that surprises people is the timing. Your 2026 premium is based on the income you reported on your 2024 tax return. So a one-time bump in income two years ago, a home sale, a Roth conversion, a big capital gain, can quietly raise your Medicare cost today.
Why It Matters
IRMAA works as a cliff, not a ramp. Go one dollar over a threshold and you do not pay a little more. You jump to the next tier for the entire year. For a married couple where both spouses are on Medicare, crossing that first line by a single dollar can cost over $2,000 in extra premiums between the two of you. That is real money for being barely over a line you did not know was there.
How the Brackets Work in 2026
IRMAA uses your Modified Adjusted Gross Income, which is your adjusted gross income plus any tax-exempt interest, like muni bond interest. Here are the 2026 tiers, based on your 2024 income.
2026 income (single)
2026 income (married, joint)
Part B per month
$109,000 or less
$218,000 or less
$202.90 (no surcharge)
over $109,000 up to $137,000
over $218,000 up to $274,000
$284.10
over $137,000 up to $171,000
over $274,000 up to $342,000
$405.80
over $171,000 up to $205,000
over $342,000 up to $410,000
$527.50
over $205,000 up to $500,000
over $410,000 up to $750,000
$649.20
over $500,000
over $750,000
$689.90
There is a separate Part D surcharge stacked on top of each tier above the first. The thresholds adjust most years, so the lines move, but the cliff structure stays the same.
A Simple Example
Say you and your spouse are 63, retired early, and living in Dublin. Your portfolio is mostly in traditional IRAs. Social Security has not started, required withdrawals are still years off, and your taxable income is genuinely low right now. This is the window people dream about, and it is also where a mistake hides.
You decide to do a large Roth conversion in one year to get ahead of future taxes. Smart instinct. But the conversion lands on your 2024 return, pushes your joint income over $274,000, and two years later your 2026 Medicare premiums jump two tiers. The conversion was still a good idea. The size and timing of it, done without watching the IRMAA lines, cost you a few thousand dollars you did not need to spend.
The fix is rarely “do not convert.” It is “convert the right amount, in the right years, while watching where the next threshold sits.” That is the whole game.
The Whole Idea
IRMAA rewards people who look two years ahead instead of one. The strategies that keep you under a line, sizing conversions, timing capital gains, coordinating withdrawals, and using a low-income year on purpose, are the same strategies that lower your lifetime tax bill. Tax and investment decisions are not two separate conversations. They are one. The hard part is that the lines move and the look-back is two years, so it is easy to trip over a threshold while you are focused on something else. That is the kind of thing worth having someone watch for you.
Frequently Asked Questions
What income counts toward IRMAA?
Your Modified Adjusted Gross Income, which is your adjusted gross income plus tax-exempt interest such as municipal bond interest. It is the income from your tax return two years prior, so your 2026 surcharge is based on your 2024 return.
Does IRMAA go away if my income drops?
Yes. IRMAA is recalculated every year, so a high-income year only affects you for one year, two years later. If your income falls back below the threshold, your premium comes back down.
Can I appeal an IRMAA surcharge?
Sometimes. If you had a qualifying life-changing event, such as retirement, the loss of a spouse, or divorce, you can file Form SSA-44 with Social Security to ask them to use your more recent, lower income instead.
Is a Roth conversion still worth it if it triggers IRMAA?
Often, yes. A surcharge is a one-year cost, while a well-timed conversion can lower taxes for decades. The point is to size and time the conversion with the IRMAA thresholds in view, not to avoid converting.
Jesse Stacy is a CERTIFIED FINANCIAL PLANNER™ and an IRS Enrolled Agent in Columbus, Ohio, where JCS Retirement Tax Advisors helps people near retirement plan their taxes and investments as one picture. This article is educational and is not tax, legal, or investment advice.
Sources: 2026 Medicare Parts A & B Premiums and Deductibles (CMS); Medicare costs (Medicare.gov); Form SSA-44 (Social Security Administration).