Personal Finance & Estate › Medicare, Medi-Cal & long-term care › Medicare Part B (doctors & outpatient)
IRMAA (income surcharge on Parts B & D)
Uses income from 2 years prior· Tax rule
Watch outA common mistake, trap or scam.
Extra Medicare Part B and Part D premiums charged to higher-income enrollees, based on the tax return from two years earlier.
See it on the Personal Finance & Estate map →How it works
2026 premiums use 2024 income: modified AGI (AGI plus tax-exempt interest) above $109,000 single or $218,000 joint. Five tiers lift Part B from $202.90 to as much as $689.90 a month per person, plus a Part D surcharge. It's a cliff: $1 over a line costs the whole tier for the year. One-time income, like a building sale, Roth conversion or large RMD, can trigger it. Social Security sets it; you can appeal on Form SSA-44 after life-changing events such as retirement.
Why it matters for you
Watch out: a sale or conversion at 63 can raise Medicare premiums at 65, for both spouses. Ask a CPA to time large income events and check whether an appeal applies.
Red flags and protection
The 2003 Medicare Modernization Act (Part B, from 2007) and the Affordable Care Act (Part D, from 2011); CMS's yearly premium notices and SSA's operations manual set the tiers.
Watch out for
Critics argue the two-year lag misstates new retirees' income and that the sharp cliffs should be smoothed; whether Congress changes the design is open.
Connections (5)
▸IRMAA (income surcharge on Parts B & D) adds surcharges to Medicare Part B (doctors & outpatient)Watch out
How they connect
Most enrollees pay a Part B premium covering about 25% of program costs; IRMAA raises that share to 35%, 50%, 65%, 80% or 85% as income rises. In 2026 that means $284.10 to $689.90 a month per person instead of $202.90. Each spouse is charged separately, usually out of Social Security checks.
When it applies
Enacted in the 2003 Medicare Modernization Act and phased in from 2007; tiers were tightened in 2018 and a top tier added in 2019.
How sure?
Social Security Act Sec. 1839(i); CMS's yearly premium fact sheet lists each tier and its income range.
Watch out for
Thresholds are inflation-indexed, but whether Congress expands means-testing to shore up Medicare's finances is a recurring proposal.
▸Required minimum distributions (RMDs) can trigger IRMAA (income surcharge on Parts B & D)Watch out
How they connect
RMDs are taxable income that grows each year with age, and Medicare uses that income to set IRMAA two years later. A large traditional IRA or 401(k) can force withdrawals above $109,000 single or $218,000 joint, adding Part B and D surcharges for both spouses even if nothing else changes.
When it applies
RMDs start at 73, or 75 if born in 1960 or later (SECURE 2.0, 2022); the premium hit lands two years after each withdrawal year.
How sure?
RMDs count in adjusted gross income (IRC Sec. 401(a)(9)); IRMAA uses modified AGI from IRS returns (Social Security Act Sec. 1839(i)).
Watch out for
Whether paying tax early through Roth conversions, which can trigger IRMAA themselves, beats facing RMD-driven surcharges later depends on future rates and lifespan.
▸IRMAA (income surcharge on Parts B & D) also surcharges Medicare Part D (prescription drugs)Law or rule (2026)
How they connect
The same income tiers that raise Part B also add a fixed monthly surcharge to Part D, roughly $14 to $91 per person in 2026. It is paid to Medicare, usually from Social Security, on top of the plan's own premium, and applies even when drug coverage comes inside a Medicare Advantage plan.
When it applies
Added by the Affordable Care Act of 2010, starting in 2011; it uses the same two-year-old tax return as Part B.
The rule
Social Security Act Sec. 1860D-13(a)(7); CMS publishes Part D IRMAA amounts each fall alongside Part B premiums.
Watch out for
Few enrollees notice the Part D surcharge separately; how its amounts move after the 2025 drug-benefit redesign is still unclear.
▸IRMAA (income surcharge on Parts B & D) is assessed by Social Security Administration (SSA)Law or rule (2026)
How they connect
SSA figures IRMAA from IRS tax data: each fall it compares your return from two years earlier with the income tiers and notifies you of any surcharge for the coming year. Appeals for life-changing events, like retirement or a spouse's death, go to SSA on Form SSA-44, not to the IRS.
When it applies
The Part B surcharge began in 2007 under the 2003 Medicare Modernization Act; Part D surcharges followed in 2011 under the Affordable Care Act.
The rule
SSA's IRMAA letters cite the tax year used; SSA regulations (20 CFR Part 418) list the qualifying life-changing events.
Watch out for
Whether using two-year-old income is fair, since retirees' income often drops sharply, is debated; appeals succeed for qualifying events but not for one-time investment gains.
▸Qualified charitable distribution (QCD) from an IRA can lower income that sets IRMAA (income surcharge on Parts B & D)Standard practice
How they connect
A QCD sends IRA money straight to charity and leaves it out of adjusted gross income, the base Medicare uses for IRMAA. At 70½ or older, giving up to $111,000 a year this way, including amounts that satisfy RMDs, can keep income under an IRMAA tier two years later.
When it applies
Created by the 2006 Pension Protection Act and made permanent in 2015; SECURE 2.0 indexed the cap to inflation from 2024.
How sure?
IRC Sec. 408(d)(8) excludes QCDs from income; IRMAA's modified AGI is AGI plus tax-exempt interest, so excluded gifts never enter it.
Watch out for
Whether a QCD or a gift of appreciated stock saves more depends on brackets, deductions and the IRMAA line; CPAs model it case by case.