The Medicare income surcharge (IRMAA), explained
It is not a tax, it does not phase in, and it is decided by a tax return you filed two years ago. For 2026 the line is $109,000 single or $218,000 joint, and crossing it by one dollar costs $1,148 per person for the year.
The 2026 tiers
| Single (2024 MAGI) | Joint | Part B total / month | Part D surcharge / month | Extra per person / year |
|---|---|---|---|---|
| ≤ $109,000 | ≤ $218,000 | $202.90 | $0.00 | $0 |
| $109,001–$137,000 | $218,001–$274,000 | $284.10 | $14.50 | $1,148 |
| $137,001–$171,000 | $274,001–$342,000 | $405.80 | $37.50 | $2,885 |
| $171,001–$205,000 | $342,001–$410,000 | $527.50 | $60.40 | $4,620 |
| $205,001–$499,999 | $410,001–$749,999 | $649.20 | $83.30 | $6,355 |
| ≥ $500,000 | ≥ $750,000 | $689.90 | $91.00 | $6,936 |
MAGI for this purpose is adjusted gross income plus tax-exempt interest. Announced by CMS November 14, 2025; brackets are indexed to inflation each year.
Why it hits people in their first Medicare year
At 65 most people are looking at the highest income years of their lives on the return Social Security reads. A final bonus, a lump-sum vacation payout, the sale of a rental, a 401(k) rollover done as a taxable distribution by mistake, or a Roth conversion at 63 all show up as a surcharge at 65. The rule does not care that the income was one-time. It cares only about the number on line 11 plus line 2a of your 2024 return.
The appeal: form SSA-44
If your income dropped because of a life-changing event, you can ask Social Security to use a more recent year. Qualifying events are specific: marriage, divorce or annulment, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, or an employer settlement payment. Retiring counts as a work stoppage. A one-time capital gain that simply is not repeating does not qualify; you wait it out.
File SSA-44 with evidence (retirement letter, final pay stub) and your estimate of the current year’s MAGI. Approved appeals are common and the reduction applies to the whole year. Denied appeals can be reconsidered.
Planning moves that stay on the right side of the line
Roth conversions before 63
Income at 63 sets premiums at 65. Conversions done by age 62 never appear on a Medicare-relevant return; conversions at 63 or later should be sized to the next tier line, not to the tax bracket alone.
Qualified charitable distributions
After 70½, gifts sent directly from an IRA to a charity satisfy required distributions without adding to MAGI. A $20,000 QCD can be the difference between tier 1 and no surcharge.
Timing gains and sales
Selling a property or a concentrated stock position in the year you turn 63 or 64 lands squarely in the lookback. Selling at 62, or spreading gains across years, often does not.
Withdrawal order
Roth withdrawals and return of basis do not count; traditional IRA withdrawals do. In retirement, which account you draw from each year is partly a Medicare decision.
These are the conversations an independent advisor is hired for. Our tools show the arithmetic; a no-cost consultation applies it to your returns.
Sources
- Social Security, "Medicare Premiums: Rules for Higher-Income Beneficiaries" (2026 tables; MAGI from your 2024 return)
- CMS, "2026 Medicare Parts A & B Premiums and Deductibles" (announced November 14, 2025)
- Social Security form SSA-44, "Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event"
- Medicare.gov, "Medicare costs" (2026)
- IRS, IRA distributions and qualified charitable distributions
Surcharge questions, answered
What is IRMAA?
The income-related monthly adjustment amount: a surcharge added to Part B and Part D premiums when your modified adjusted gross income from two years earlier is above $109,000 (single) or $218,000 (joint) for 2026. Six tiers; the top tier adds $487 to Part B and $91 to Part D each month.
How much is the Medicare surcharge for high income in 2026?
From $95.70 a month per person (tier 1, Parts B and D combined) to $578 a month per person (top tier). A couple in tier 1 pays about $2,297 more for the year; a couple in tier 3 about $9,240.
Can I appeal the surcharge after I retire?
Yes. Retirement is a “work stoppage,” a qualifying life-changing event. File form SSA-44 with proof (a letter from the employer, a final pay stub) and an estimate of this year’s income, and Social Security recalculates using the lower year.
Does a Roth conversion trigger the surcharge?
It can. A conversion is ordinary income, so it raises MAGI for that year and can move you up a tier two years later. Converting in the years before Medicare, or in amounts that stay under the next line, is the usual planning approach.
Do the math
Still working at 65
Working longer keeps income high; here is what that means at enrollment.
Read the guide →
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