What is the IRMAA (Income-Related Monthly Adjustment Amount)?
IRMAA stands for Income-Related Monthly Adjustment Amount. It’s an additional surcharge that some Medicare beneficiaries pay in addition to their standard monthly premiums for Medicare Part B and Medicare Part D prescription drug coverage. The surcharge kicks in when your income exceeds a certain threshold.
Essentially, those who pay the IRMAA are paying a greater share of their actual Medicare Part B and D premiums. As it stands, the government pays a substantial portion — about 75% — of the Part B premium for most beneficiaries who pay, on average, the remaining 25%. For 2024, premiums from Parts B and D covered 23% of Medicare program costs, according to the 2025 Trustees’ Report.
If you are a higher-income beneficiary, you will pay a larger percentage of the total cost of Part B based on income reported on your annual tax return. You’ll pay monthly Part B premiums equal to 35%, 50%, 65%, 80%, or 85% of the total cost, depending on your income and subsequent surcharge amount. For 2025, the IRMAA Part B surcharge ranged from $185.00 to $443.90 monthly, or $2,220 to $5,326.80 annually, on top of the base premium of $185.00.
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Your additional premium for Part D is a percentage of the national base beneficiary premium, which is $36.78 for 2025. The IRMMA surcharge for Part D 2025 ranged from $13.70 to $85.80 monthly or $164.40 to $1,029.60 annually.
One of the quirks of the IRMAA is that it is based on your tax returns from two years prior; your 2026 liability will be based on the income shown on your 2024 tax return. For a preview of possible 2026 numbers, read Medicare Premiums 2026: Projected IRMAA Brackets and Surcharges for Parts B and D.
Who pays the IRMAA?
IRMAA applies to Medicare beneficiaries whose yearly income exceeds certain thresholds set by the Social Security Administration (SSA). These thresholds or brackets are adjusted annually, except for the fifth bracket: That bracket was added by the Bipartisan Budget Act of 2018 and won’t be indexed for inflation until 2028.
The SSA uses the most recent complete federal tax return data to assess your liability for the IRMAA. For 2026, the SSA will look at your 2024 tax return to calculate the surcharge you owe, if any.
If you are liable for the IRMAA surcharge, the SSA will send you an Initial Determination Notice with your premium amount(s) and the reason for the determination. If you have both Medicare Part B and Medicare Part D prescription drug coverage, you’ll pay higher premiums for each. If you have only one — Medicare Part B or Medicare prescription drug coverage — you’ll pay an income-related monthly adjustment amount only on the benefit you have.
How is the IRMAA calculated?
The SSA uses your income tax information from two years before to determine if you owe an IRMAA. So, for example, whether or not you paid the 2025 IRMAA is based on your 2023 tax return. For 2026, you will need to take a look at your 2024 tax return.
Your IRMAA could change during the year. Sometimes, the IRS only provides information from a return filed three years prior; for 2026 surcharges, that would mean the SSA is using your 2023 tax return and not your 2024 return. If the SSA uses the 2023 tax year data, and you filed a return for tax year 2024 or did not need to file a tax return for tax year 2024, contact the SSA to update their records.
Amended tax returns. If you amend your tax return, and it changes the income used to determine the IRMAA amounts, contact the SSA to report your new MAGI. The SSA will need to see a copy of your amended tax return and the acknowledgment receipt from the IRS. The SSA will then correct or remove your IRMAA amounts where appropriate.
What kind of income can trigger the IRMAA ?
IRMAA is based on your Modified Adjusted Gross Income (MAGI). This typically includes your adjusted gross income (AGI) plus certain tax-exempt interest.
The income that is used for IRMAA is defined by Social Security as being: “Adjusted gross income plus any tax-exempt interest” or everything on lines 2a and 8b of the IRS form 1040.
Here’s a look at what counts as IRMAA income:
- Social Security benefits (taxable portion), pension income
- Wages and tips
- Interest
- Alimony
- Dividends
- Rental income
- Capital gains
- Dividends, including municipalities
- Distributions from qualified/tax deferred investments
- Distributions from traditional 401(k)s, 403(b)s, IRA’s, SEP IRAs
Tax-exempt interest and income added back in that determine your MAGI IRMAA income:
- Tax-exempt interest that has been earned or accrued. For instance, municipal bonds, which can be significant for a lot of retirees
- Interest from U.S. savings bonds used for qualifying education expenses
- Income earned abroad that was excluded from gross income
- Non-taxable income from U.S. territories, including: Puerto Rico, Guam, American Samoa and the Northern Mariana Islands
What does NOT count as IRMAA income:
- Distributions from Roth accounts
- Distributions from Health Savings Accounts (HSAs) and 401(k) plans
- Proceeds from life insurance
- Portions of QLAC Annuities
Which Medicare parts are affected?
Only Medicare Part B and Part D premiums are subject to the IRMAA surcharge. Medicare Part A hospital insurance is generally not affected.
If you are expected to pay IRMAA, SSA will notify you that you have a higher Part D premium.
How is the IRMAA paid?
IRMAA surcharges for Part B and Part D are paid separately. Part B IRMAA is automatically added to your monthly premium bill, while the Part D IRMAA must be paid directly to Medicare, not your plan or employer. It’s your responsibility to pay the surcharge even if your employer or a third party, such as a retirement system, pays your Part D plan premiums. You’ll get a bill each month from Medicare for your Part D IRMAA, and you can pay it the same way you pay your Part B premiums if you pay them directly.
If you have your Medicare Part B premiums deducted from your Social Security check, the SSA will also deduct the IRMAA Part B surcharge. If your check does not cover the full amount, you’ll have to pay the shortfall directly. You can learn more about direct payment options by reading Medicare Premiums 2025: IRMAA Brackets and Surcharges for Parts B and D.
How long do you have to pay the IRMAA?
Fortunately, your IRMAA can change each year based on your income. If your income drops the next year, your IRMAA could be less or disappear altogether. If you had a one-time spike in income, you can look forward to paying less the next year when your income returns to normal.
IRMAA surcharges aren’t minimal. In 2025, they can cost up to an additional $6,356.40 annually, or $5.326.80 for Part B and $1,029.60 for Part D. Try to consider the income sources you expect to tap in retirement and come up with a distribution/income plan that will limit your exposure to the IRMAA surcharges.
Many married couples need to plan for the possibility of an IRMAA surcharge. When the first spouse dies, the surviving spouse becomes an individual tax filer. That person may well jump several IRMAA tiers in the following years. That’s because the survivor usually receives roughly the same income, but now falls into different income brackets with higher tax rates.
Can you appeal the IRMAA?
If you believe the IRMAA determination is incorrect, or if you’ve experienced a life-changing event that significantly reduced your income, such as retirement, divorce, or the death of a spouse, you can appeal the decision with the SSA.
Use Form SSA-44 to submit your request along with supporting documentation. If you prefer or need to visit an office in person, appointments are generally required. You can find the phone number for your local office using the Office Locator function on the SSA website or by calling 1-800-772-1313 (TTY 1-800-325-0778) for assistance.
You can get more detailed information by reading How to Appeal the IRMAA for Medicare Parts B and D.
Avoiding the IRMAA takes planning
If you are enrolled in Medicare and your income exceeds the income limits, you’re going to pay more for your Medicare Part B and Part D premiums; the higher your MAGI, the higher the IRMAA surcharge.
The IRMAA can sneak up on you if you aren’t careful. It only takes earning $1 over the threshold to trigger the surcharge. In 2025, that $1 of income would cost you an additional $1,052.40 annually in Medicare surcharges, consisting of $888 for Part B and $164.40 for Part D. That’s just the first tier; there are four more. The maximum surcharge in 2025 is $6,356.40: an extra $5,326.80 for Part B and an extra $1,029.60 for Part D.
A Roth IRA conversion of a traditional IRA is one way to reduce income and, therefore, reduce or avoid the IRMAA. However, a Roth conversion takes planning. You can convert the account at once or over several years. The most important thing to consider is the year you intend to enroll in Medicare. Completing the conversion three years before you apply is critical to avoid triggering the IRMAA. The tax-free income from the new Roth IRA will not count toward your IRMAA MAGI, the figure that either damns or exempts you from the IRMAA surcharges.
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