IRMAA: How Medicare's Income Surcharge Works

What IRMAA is, and who decides it

Most people on Medicare pay the standard Part B premium, which is $202.90 a month in 2026 according to the CMS 2026 premiums fact sheet. A smaller group pays more. The difference is the income-related monthly adjustment amount, shortened to IRMAA: a surcharge added to the Part B premium and, separately, to the premium for Part D prescription drug coverage when income passes set thresholds.

The decision belongs to the Social Security Administration (SSA). It uses tax information that the IRS sends over each year, applies the published table, and mails a notice. Your Medicare Advantage or drug plan has no say in it, and neither does a licensed agent. What an agent can do is help you spot when the notice is based on a year that no longer reflects your situation, and point you to the form that asks for a recount.

Two details surprise people. The Part D surcharge applies whether your drug coverage comes from a stand-alone Part D plan or is built into a Medicare Advantage plan. And the CMS Medicare & You 2027 handbook explains that the Part D amount is paid to Medicare, not to your plan, so it is billed or withheld separately from whatever premium your plan charges.

The two-year look-back and what counts as income

For IRMAA, income means modified adjusted gross income (MAGI). SSA's operating manual, POMS HI 01101.010, defines it as adjusted gross income plus tax-exempt interest. Both lines come straight off Form 1040, which is why interest from municipal bonds, invisible in your AGI, still counts here.

The year used is generally the tax year two years before the premium year. The same manual uses the example that 2026 premiums rest on 2024 returns, and SSA's Medicare premiums page says the same. Following that rule, 2027 premiums will generally look at 2025 returns.

That timing is the root of most IRMAA frustration in the Sioux Falls area. Take a nurse who retires from one of the city's hospital systems in the middle of 2025. Her 2027 Medicare premium will be set by a 2025 return that still includes half a year of salary, plus any payout of unused leave. Anything that lifts AGI for one year counts in full for that year: selling farmland or a rental, a large capital gain, a big required minimum distribution, or converting a traditional IRA to a Roth.

Married couples

On a joint return, the joint thresholds apply, and each spouse who is on Medicare pays the surcharge on their own premium. Married people who lived together at any point in the year but file separately face a much steeper table, shown in the next section.

The 2026 IRMAA brackets

The table below reproduces the 2026 schedule from the CMS fact sheet, which SSA also publishes in its IRMAA sliding-scale tables. Income is 2024 MAGI. The Part B column shows your total monthly Part B premium. The Part D column is the surcharge added to whatever your drug plan charges.

Source: CMS, 2026 Medicare Parts A & B Premiums and Deductibles; SSA POMS HI 01101.020. 2026 plan year.

Married and filing separately

If you are married, lived with your spouse at any time during the tax year and file separately, the table has only three rows, and the second row starts near the top of the regular schedule.

Source: CMS, 2026 Medicare Parts A & B Premiums and Deductibles; SSA POMS HI 01101.020. 2026 plan year.

What about 2027?

CMS normally releases the next year's Part B premium and IRMAA table in the fall. When we checked on October 19, 2026, the address CMS uses for the 2027 fact sheet returned a page-not-found error. Until it is published, every figure on this page is the 2026 schedule, and we label it that way. We will update this guide when the 2027 numbers are out.

What a bracket costs over a year

IRMAA works like a set of steps rather than a ramp. One dollar over a threshold puts you in the higher bracket for the whole year. The examples below use the 2026 table and are illustrations, not quotes.

Source: Big Sioux Benefits calculation from the CMS 2026 IRMAA table. Illustrative only.

The first two rows are $2,000 of income apart and $1,148.40 a year apart in premiums. The last row is why couples who file separately for other reasons should run the Medicare math first: the same $150,000 on an individual return would add $202.90 to Part B, not $446.30.

Life-changing events and Form SSA-44

If your income has dropped since the year SSA used, you can ask for a new decision based on a more recent year. SSA's manual, POMS HI 01120.005, limits this to eight life-changing events:

• Death of a spouse
• Marriage
• Divorce or annulment
• Work reduction
• Work stoppage
• Loss of income-producing property, when the loss was not your choice
• Loss of a pension
• An employer settlement payment

Retirement counts as a work stoppage. Moving from full time to part time counts as a work reduction. A one-time gain or a market drop does not count, which is a frequent source of disappointment.

The request is usually made on Form SSA-44, though SSA's manual treats the form as optional; you can also make the request by phone or at an office. You will be asked for proof of the event and an estimate or copy of the newer year's return. Social Security's number is 1-800-772-1213 (TTY 1-800-325-0778), as listed on Medicare.gov.

Mistakes, appeals and reconsideration

A life-changing-event request is not the only route. If the tax data itself is wrong, for example an amended return SSA has not seen, or a return that was processed twice, you can ask for a correction. If you disagree with the decision, you can request reconsideration. According to POMS HI 01140.001, the request is due within 60 days of receiving the notice, and SSA assumes you received it five days after the date printed on it.

1. Read the notice and find the tax year and the MAGI figure SSA used.
2. Compare it with your own return for that year. Look for amended returns, duplicated income or a filing status error.
3. Decide which route fits: a correction of the data, a new decision based on a life-changing event, or reconsideration.
4. Gather proof: the return, a letter from your former employer, a death certificate or a divorce decree.
5. Contact SSA within the 60-day window and keep a copy of everything you send.

IRMAA is reviewed every year as new tax data arrives. A surcharge in one year does not mean a surcharge for life.

How IRMAA fits with your plan choice

IRMAA follows you whichever path you choose. With Original Medicare and a Medigap policy, you pay the Part B premium with any surcharge, plus the Medigap premium, plus a stand-alone drug plan with any Part D surcharge. With a Medicare Advantage plan, you still pay the Part B premium with any surcharge, plus any plan premium, plus the Part D surcharge if the plan includes drugs.

That means a $0 plan premium never makes your total Medicare cost $0 if you are in an IRMAA bracket. When we compare plans for clients in the higher brackets, we add the surcharges to every option so the totals are honest. For the full picture of what Medicare costs, see our existing Medicare costs breakdown.

Figures and sources

Every figure on this page, where it comes from, and the period it covers. Checked October 19, 2026.

Official sources

• CMS: 2026 Medicare Parts A & B Premiums and Deductibles
• SSA: Medicare premiums, rules for higher-income beneficiaries
• SSA POMS HI 01101.020: IRMAA sliding scale tables
• SSA POMS HI 01101.010: Modified adjusted gross income
• SSA POMS HI 01120.005: Life-changing events
• SSA POMS HI 01140.001: IRMAA appeals
• CMS: Medicare & You 2027 handbook

How this guide is made: the Big Sioux Benefits Data Desk writes from official sources and checks each figure against the page it cites. This is general education, not advice about your situation. Plan details vary; confirm costs and coverage with Medicare.gov, the agency named above, or a licensed agent.