IRMAA Calculator: Will Your Income Raise Medicare Premiums?

IRMAA, the income-related monthly adjustment amount, is a surcharge on Medicare Part B and Part D premiums for people with higher incomes. Everyone with Part B pays the standard premium, $202.90 a month in 2026. If your modified adjusted gross income is above $109,000 on a single return or $218,000 on a joint return, you pay more: between $284.10 and $689.90 a month for Part B, plus a surcharge of $14.50 to $91.00 a month on top of whatever your Part D drug plan costs (CMS, 2026 fact sheet). If you are in a Medicare Advantage plan with drug coverage, the Part D surcharge still applies.

The idea is that the government pays less of the cost of Part B for people who can afford more. A standard premium covers about a quarter of what Part B costs; in the five IRMAA tiers you pay 35%, 50%, 65%, 80% and 85% of it (SSA POMS HI 01101.031). CMS says roughly 8% of people with Part B pay the surcharge. For the readers this site is written for, retired couples with sizable IRAs and taxable portfolios, the share is much higher, and the surcharge is often a cost nobody planned for, because it shows up in a premium notice two years after the income that caused it.

Social Security makes the determination, using income data the IRS sends it, and deducts the surcharge from your benefit along with the premium. It applies per person: on a joint return, both spouses are tested on the same joint income, and each spouse on Medicare pays the surcharge.

IRMAA uses its own, simple version of modified adjusted gross income: your adjusted gross income (line 11 of Form 1040) plus tax-exempt interest (line 2a) (SSA POMS HI 01101.010; 20 CFR part 418). It is not your taxable income, so the standard deduction, the senior deduction and itemized deductions do nothing for it.

Everything that reaches AGI counts:

• wages and self-employment income, and the taxable part of pensions and annuities;
• withdrawals from traditional IRAs, 401(k)s and 403(b)s, including RMDs and Roth conversions;
• taxable interest, ordinary and qualified dividends, and net capital gains, including gains distributed by mutual funds you did not sell;
• the taxable part of Social Security, which can be up to 85% of benefits once other income is high enough;
• rental and business income, and the gain on a home sale above the exclusion.

Some money does not count: withdrawals from a Roth IRA, qualified charitable distributions sent straight from an IRA to charity, HSA withdrawals for medical costs, the untaxed part of Social Security, loan proceeds, and cash you take out of savings or a brokerage account without selling at a gain. A net capital loss can reduce MAGI, but by no more than $3,000 a year.

Tax-exempt interest is the trap. Municipal bond interest is free of federal income tax, but IRMAA adds it back, and the formula that decides how much of your Social Security is taxable adds it too. A move from taxable bonds to municipal bonds can cut your income tax and leave your Medicare premiums exactly where they were. The calculator above asks for tax-exempt interest separately for that reason.

Premiums for each year are based on the tax return from two years earlier. 2026 premiums are generally based on 2024 returns; if the IRS has not yet processed that year, Social Security uses the return from three years earlier and corrects it later (SSA POMS HI 01101.010). So the income you take in 2026 sets your 2028 premiums, which is why the calculator labels its result for 2028.

Two consequences follow. First, the year that sets your first Medicare premiums at 65 is the year you turn 63, often a full working year with the highest salary of a career. Second, there is no way to fix a high-income year after it ends, except through the life-changing-event process described below. Planning has to happen in the income year, before December 31.

The 2028 thresholds will not be published until the fall of 2027. They are indexed to inflation, so they usually rise a few thousand dollars a year. The calculator uses the 2026 tiers as its estimate, which errs slightly on the cautious side: a household that stays under a 2026 threshold will almost certainly be under its 2028 version.

Six rows: the standard premium and five surcharge tiers. Single covers single, head of household and qualifying surviving spouse returns, and married people filing separately who lived apart all year. The annual column is what one person pays above the standard premium for the year, Part B and Part D together.

Source: CMS, 2026 Medicare Parts A & B premiums and deductibles. Married filing separately, having lived with your spouse at any time in the year: the surcharge starts above $109,000 at the fourth-tier amounts, and the top tier starts at $391,000.

A couple in the top tier pays $13,872.00 a year more than a couple on the standard premium. That is real money, but it is capped: above $500,000 single or $750,000 joint, more income adds nothing. The thresholds that matter for most retirees are the first two, because that is where ordinary retirement income, RMDs and one-off events tend to land.

Income tax is marginal: a higher bracket taxes only the dollars inside it. IRMAA is not. One dollar over a threshold puts you in the whole tier for the whole year, so the surcharge for that dollar can be thousands.

Illustrative example: the people and figures below are hypothetical, not real clients. Numbers are calculated from the stated assumptions.

Take a married couple, both 70, with $210,000 of pension and IRA income. Their MAGI is $210,000, under the $218,000 joint threshold, so they pay the standard premium. In 2026 they sell shares for a $10,000 long-term gain. MAGI rises to $220,000, $2,000 over the line. In 2028 each of them pays $81.20 a month more for Part B and $14.50 more for Part D: $2,296.80 for the household.

Add the $1,764 of federal income tax on the gain and the sale costs $4,061, or 40.6% of the gain, for a couple whose long-term gains are normally taxed at 15%. Had they sold $8,000 of gain instead, staying exactly at the threshold, the Medicare cost would have been zero. The rest could have waited until January.

Steady income rarely does it alone. The usual cause is a lump that lands on top of it in one tax year:

• Required minimum distributions. RMDs start at 73, or 75 for anyone born in 1960 or later, and grow as a share of the account each year. A large IRA can push a couple over the first threshold on RMDs alone, and taking the first RMD in April of the following year puts two RMDs in one tax year. The RMD calculator projects them.
• Roth conversions. Every dollar converted is taxable income that year. A conversion sized only to fill a tax bracket can overshoot an IRMAA threshold that sits a few thousand dollars away.
• Stock and fund sales. Rebalancing a taxable account, selling a concentrated position, or capital gain distributions from mutual funds in December. The capital gains tax calculator prices a sale including its IRMAA cost.
• A pension lump sum. Taking a pension as a lump sum instead of an annuity, without rolling it into an IRA, makes the whole amount taxable in one year.
• Selling a home. Up to $250,000 of gain on a main home is excluded, or $500,000 on a joint return (IRS Topic 701). Gain above that is a capital gain and counts in full. Long-time owners in expensive markets are the ones caught, and so are widows, whose exclusion falls to $250,000 once they can no longer claim the joint figure.
• A final working year. Salary plus a bonus, deferred compensation or vested stock in the year you retire, which sets premiums two years later when your income is far lower.

When a spouse dies, household income often falls less than people expect: the survivor keeps the larger of the two Social Security benefits, usually most of a pension, and inherits the IRAs, whose RMDs continue. But from the year after the death the survivor files as single, and the single IRMAA thresholds are half the joint ones.

A widow whose income stays at $150,000 paid no surcharge as part of a couple; the joint threshold is $218,000. As a single filer she is in tier 2, and pays $2,884.80 a year more for Medicare than the standard premium, on top of the higher income tax brackets that also apply to single filers. The death of a spouse is a life-changing event, so if her income has fallen she can ask Social Security to use the more recent year; if it has not fallen, there is nothing to appeal.

Couples who expect one spouse to outlive the other by many years have a reason to do Roth conversions while they still file jointly: the tax on the conversion is paid at joint brackets, and the survivor's later income, and IRMAA, is lower.

None of these is worth doing for the surcharge alone if it costs more in tax or in a worse investment decision. They are worth checking each fall, before the income year closes.

Give from the IRA, not the checking account

From 70½ you can send up to $111,000 a year (2026) straight from an IRA to charity as a qualified charitable distribution. It never enters AGI, so it lowers MAGI dollar for dollar, and once RMDs start it counts toward them (IRS Publication 590-B). A gift written from checking does not lower MAGI at all, even if you itemize. See qualified charitable distributions.

Spread gains and conversions across years

Because each year is tested on its own, two sales of $30,000 in different years can cost nothing where one sale of $60,000 costs a tier. Sell part of a position in December and the rest in January, or size each year's Roth conversion to the room the calculator shows. Harvesting losses in the same year offsets gains before they reach AGI.

Convert to Roth before 63

Income in the year you turn 63 sets your premiums at 65, so conversions in the years before that are never tested for IRMAA at all. For people who retire in their late 50s or early 60s, those years are the cheapest time to convert. After that, conversions are still often worth it, because they shrink future RMDs and future MAGI; the question becomes whether one or two years in a higher tier buys many years in a lower one. Our guide to Roth conversions before RMDs works through the sizing.

Remember what does not help

Municipal bonds lower income tax but not MAGI. Itemized deductions and the standard deduction do nothing for MAGI. And a surcharge year is not a disaster to be avoided at any price: a couple who crosses the first joint threshold pays $2,296.80 for the year, which a conversion that saves tax for the next 20 years can easily justify.

If your income has dropped since the lookback year because of a life-changing event, you can ask Social Security to use a more recent year's income instead (SSA). The events are set by regulation (20 CFR 418.1205):

• marriage;
• divorce or annulment;
• death of a spouse;
• work stoppage, or a reduction in the hours you or your spouse work;
• loss of income-producing property through no choice of yours, such as a disaster, arson or fraud, but not an ordinary investment loss;
• loss of pension income, through the cessation, termination or reorganization of an employer's plan;
• an employer settlement payment because the employer closed, went bankrupt or reorganized.

The request is made on Form SSA-44, or in person or by phone with Social Security. You provide evidence of the event and of the more recent year's income: the filed return if you have it, or an estimate if the year is not over (SSA POMS HI 01120.001). The reduction must lower or remove your surcharge. Retirement counts as work stoppage, so the most common use is the first year or two of Medicare, when premiums are still based on a working year.

What does not qualify matters as much. A one-time spike from a home sale, a stock sale, a Roth conversion or a large IRA withdrawal is not a life-changing event, and neither is a fall in dividends from ordinary investment risk or a rise in expenses (20 CFR 418.1210). That income has to be planned around, not appealed.

When the figures are wrong: reconsideration

A different route applies if you believe the determination itself is wrong. You can request a reconsideration within 60 days of receiving the notice, usually on Form SSA-561 (SSA POMS HI 01140.001), and from there a hearing before an administrative law judge. If the problem is that the IRS data was wrong, or you have since filed an amended return, Social Security will want proof from the IRS of the correction and will make a new determination rather than reconsider (20 CFR 418.1330 to 418.1335). Our Medicare enrollment and IRMAA guide follows one couple through an SSA-44 filing.

Illustrative example: the people and figures below are hypothetical, not real clients. Numbers are calculated from the stated assumptions.

The calculator opens on Tom, 71, and Linda, 68, filing jointly. Their 2026 income is $38,000 from Tom's pension, $62,000 of IRA withdrawals including his RMD, $9,000 of taxable interest, $24,000 of dividends, $12,000 of net capital gains and $6,000 of municipal bond interest, plus $74,000 of Social Security between them. Of the Social Security, $62,900 is taxable, the 85% maximum, so AGI is $207,900. Adding the municipal interest back gives MAGI of $213,900, $4,100 under the $218,000 joint threshold. They will pay the standard premium in 2028.

They are considering a $40,000 Roth conversion this year. It would lift MAGI to $253,900, tier 1, and cost $2,296.80 in 2028 surcharges for the two of them. A conversion of $4,100 costs nothing in IRMAA. Whether the larger conversion is still worth it depends on their tax rate now against later, which the conversion guide covers. Their 2024 MAGI was $231,000, so in 2026 they are paying tier 1 premiums: $2,297 for the year.

• Married filing separately.Its IRMAA thresholds depend on whether you lived with your spouse, and are punitive if you did. Use a tax professional's software for it.
• Rental, business and other income. Add net rental or business income to wages if you have it; the calculator treats it the same way for MAGI.
• 2028 thresholds and premiums. It applies the 2026 tiers until CMS publishes new ones. The retirement numbers page collects each year's figures, and the healthcare cost estimator adds premiums and out-of-pocket costs.
• Part-year Medicare. It counts anyone who will be 65 by the end of 2028 as on Medicare for the whole year; someone who turns 65 in the autumn pays for fewer months.