Medicare Facts
IRMAA: A Surcharge That Arrives Two Years Late
Higher earners pay more for Parts B and D, and the charge is based on a tax return filed two years earlier. One dollar over a threshold moves the whole bill.
Figures reviewed for 2026
By the SecureCare65 editorial team · Published October 15, 2026 · Reviewed for 2026 by a licensed agent
The income-related monthly adjustment amount is a surcharge on Part B and Part D premiums for higher earners. It is the only part of Medicare that looks at your tax return, it uses a two-year-old one, and it moves in steps rather than gradually, which is where the surprises come from.
How the amount is set
Social Security receives your modified adjusted gross income from the Internal Revenue Service and applies it to a bracket table. For 2026, a single filer under $109,000 and a joint filer under $218,000 pay the standard $202.90 Part B premium. Above those lines the premium steps up through five more brackets, reaching $689.90 at the top, with a separate but smaller add-on to Part D.
The brackets are cliffs rather than slopes. Earning one dollar past a threshold moves the entire premium to the next step, which can add several hundred dollars over the year for a rounding error of income.
Why the letter cites an old tax year
The look-back is two years. A surcharge applied in 2026 is based on the return filed for 2024. That lag is the reason a person who retired in 2025 can still receive a 2026 bill based on their final working year, and it is also why the charge often disappears a year after income drops.
The letter from Social Security is not a bill for a mistake. It is a determination, and it comes with a form to dispute it if the underlying facts changed.
The life events that reduce it
Social Security accepts a handful of specific events as reasons to use current income instead of the older return: marriage, divorce, the death of a spouse, loss of a pension, and work stoppage or a reduction in hours. The request is filed on Form SSA-44 with documentation, and approved requests adjust the premium forward.
What does not qualify is the general complaint that income fell. Investment losses, a large one-time capital gain the year before, and a Roth conversion you now regret are not events on the list, which is worth knowing before counting on relief.
Levers that help if you plan ahead
Qualified charitable distributions from an IRA after age seventy and a half satisfy the charitable intent without adding to adjusted gross income, which is often better than writing a check. Roth conversions are the reverse: they raise income in the year they happen, and that year may set a surcharge two years later.
Capital gains harvested in a single year can push someone over a bracket for one year only. If a large sale is unavoidable, spacing it across tax years is frequently the cheapest advice available, and it needs to happen before December, not after.
The short version
IRMAA reads a two-year-old tax return, moves in cliffs, and can be appealed only for specific life events. If a big income year is coming, plan it with a tax advisor before it happens, not after the Social Security letter.
Official source
The federal guide behind this page
Medicare publishes its own handbook on this topic. It is linked here so you can check any figure on this page against the source.
- How Income Affects Your Drug Coverage PremiumCMS 11469Read the PDF
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