Medicare · 12 min read
Medicare and IRMAA in 2026: The Four Parts, the Income Tiers and the Two-Year Look-Back
Medicare has four parts, and higher-income beneficiaries pay an income-related surcharge, IRMAA, on Parts B and D. For 2026 it starts above $109,000 of modified adjusted gross income for single filers and $218,000 for joint filers, measured on the 2024 tax return, and each tier applies in full once income crosses it by a dollar.
For most people, Medicare at 65 is a manageable line in the budget. For households with higher incomes, it becomes something else: a premium that moves with the tax return. A Roth conversion, a property sale or a final year of salary can add several thousand dollars a year to what a couple pays for Part B and Part D, two years after the income arrives. The surcharge is predictable, which means it can be planned for. This guide sets out the structure of Medicare, the 2026 income tiers and the decisions that move a household across them.
What follows is educational. Premium determinations are made by the Social Security Administration from IRS data, and any specific situation should be reviewed with a tax professional.
Chart
2026 Medicare Part B premium by joint income
Monthly premium per person for married couples filing jointly, by modified adjusted gross income from two years earlier. Part B only; Part D surcharges are separate.
Source: CMS · 2026 Medicare Parts A & B premiums and deductibles fact sheet · joint-return brackets
View the data
| Joint income (MAGI) | Monthly Part B premium | Surcharge (IRMAA) |
|---|---|---|
| Up to $218,000 | $202.90 | $0.00 |
| $218,001–$274,000 | $284.10 | $81.20 |
| $274,001–$342,000 | $405.80 | $202.90 |
| $342,001–$410,000 | $527.50 | $324.60 |
| $410,001–$749,999 | $649.20 | $446.30 |
| $750,000 and up | $689.90 | $487.00 |
What the IRMAA Question Is Really Asking
The income-related monthly adjustment amount, or IRMAA, raises Part B and Part D premiums for beneficiaries above set income levels. Whether it applies to a given household comes down to four narrower questions:
- Which year’s income? Generally the tax return from two years before the premium year.
- Which measure of income? A modified adjusted gross income that adds certain tax-free income back to AGI.
- Which tier? Five income levels above the standard premium, each a fixed charge rather than a gradual one.
- Charged to whom? Each enrolled person, so a married couple pays it twice.
Before those questions, it helps to see what the surcharge is added to.
Medicare’s Four Parts and What They Cost in 2026
Medicare is four components, each with its own premium and cost-sharing. (CMS, 2026 Parts A & B fact sheet)
| Part | What it covers | 2026 premium | 2026 cost-sharing |
|---|---|---|---|
| A: Hospital insurance | Inpatient hospital stays, skilled nursing facility care, hospice, some home health | $0 with 40 quarters (10 years) of covered work, own or spouse’s; $311/month with 30–39 quarters; $565/month with fewer than 30 | $1,736 deductible per benefit period; $434/day for days 61–90; $868 per lifetime reserve day; $217.00/day for skilled nursing days 21–100 |
| B: Medical insurance | Physician visits, outpatient care, preventive services, durable medical equipment | $202.90/month standard, up $17.90 from 2025 | $283 annual deductible |
| C: Medicare Advantage | Private plans that replace Original Medicare (A and B), often bundling drug coverage and some dental, vision and hearing | Varies by plan and county; the Part B premium is still owed | Varies by plan |
| D: Prescription drugs | Outpatient prescription drugs | Varies by plan | Deductible no higher than $615; out-of-pocket spending capped at $2,100 (up from $2,000 in 2025) |
(CMS, 2026 Parts A & B fact sheet; Medicare.gov, drug coverage costs)
For Part D premiums, two 2026 reference points bracket the typical cost. CMS projects the average stand-alone drug plan premium at $34.50 a month, and the national base beneficiary premium, the benchmark used in penalty calculations, is $38.99. (CMS, 2026 MA and Part D release; CMS, 2026 Part D bid information) Part B is where IRMAA has the largest dollar effect, and both B and D surcharges are added to the premiums above rather than replacing them.
How IRMAA Is Measured
The two-year look-back
Social Security sets each year’s IRMAA from the modified adjusted gross income the IRS reports for the tax year two years before the premium year. (20 CFR §418.1135) 2026 premiums therefore depend on 2024 income. If the IRS cannot supply that year, Social Security uses the return from three years prior and corrects the determination once the later data arrive. (20 CFR §418.1135)
What counts as income
The measure is adjusted gross income plus certain income that is otherwise excluded, most importantly tax-exempt interest. Also added are U.S. savings bond interest excluded for education expenses, excluded foreign earned income, and certain income from U.S. territories. (20 CFR §418.1010) Municipal bond interest that never shows up in taxable income still counts here, which surprises many retirees who hold munis to reduce their tax bill.
Per person, and in every plan type
IRMAA is charged per beneficiary. When both spouses are enrolled, each pays the surcharge, and both are measured on the same joint MAGI. Enrollees in Medicare Advantage still owe the Part B premium and any Part B IRMAA, and a plan that includes drug coverage carries the Part D IRMAA as well.
The 2026 IRMAA Tiers
These are the figures CMS published for 2026, based on 2024 MAGI. (CMS, 2026 Parts A & B fact sheet)
| 2024 MAGI, single | 2024 MAGI, joint | Part B surcharge | Total Part B premium | Part D surcharge (added to the plan premium) |
|---|---|---|---|---|
| $109,000 or less | $218,000 or less | $0.00 | $202.90 | $0.00 |
| $109,001–$137,000 | $218,001–$274,000 | $81.20 | $284.10 | $14.50 |
| $137,001–$171,000 | $274,001–$342,000 | $202.90 | $405.80 | $37.50 |
| $171,001–$205,000 | $342,001–$410,000 | $324.60 | $527.50 | $60.40 |
| $205,001–$499,999 | $410,001–$749,999 | $446.30 | $649.20 | $83.30 |
| $500,000 or more | $750,000 or more | $487.00 | $689.90 | $91.00 |
Married people who file separate returns and lived with their spouse at any time during the year face a compressed schedule: $0 up to $109,000, then $446.30 (Part B) and $83.30 (Part D) up to $391,000, and $487.00 and $91.00 at $391,000 or more. (CMS, 2026 Parts A & B fact sheet)
Each boundary is a cliff. Income one dollar above a threshold triggers that tier’s full charge for the year. For a married couple both on Medicare, crossing $218,000 costs $81.20 × 2 = $162.40 a month in Part B surcharges, plus $14.50 × 2 = $29.00 in Part D surcharges, or $191.40 a month in all: $2,296.80 for the year, at 2026 rates.
The standard 2026 Part B premium is $202.90. Surcharges start above $109,000 (single) or $218,000 (joint) of 2024 MAGI, apply to each enrolled spouse, and jump in full at every threshold.
Enrollment Windows and Late Penalties, Briefly
IRMAA is not the only way to overpay. Enrollment timing carries permanent surcharges of its own, covered in detail in our guide to Medicare’s seven-month window.
- Initial Enrollment Period: seven months, running from three months before the 65th birthday month to three months after it.
- Special Enrollment Period: for people covered through their own or a spouse’s current employment at 65, eight months after that coverage or work ends to enroll in Part B, and 63 days for Part D. COBRA and retiree coverage do not qualify. (Medicare.gov, working past 65)
- General Enrollment Period: January 1 through March 31 each year, with coverage starting the month after sign-up and late penalties likely.
- Part B late penalty: 10 percent of the standard premium for each full 12-month period of delay, for as long as Part B lasts; at $202.90, one year adds about $20 a month. (Medicare.gov, late enrollment penalties)
- Part D late penalty: 1 percent of the national base beneficiary premium, about $0.39 in 2026, for each month without creditable coverage, also permanent. (Medicare.gov, late enrollment penalties)
When Income Has Fallen: Asking for a Newer Year
Because the look-back is two years, the year after retirement is often priced on a working year’s income. The regulations allow a beneficiary to ask Social Security to use a more recent year, including an estimate of the current year, after one of a short list of major life events. (20 CFR §418.1205) The qualifying events are:
- Death of a spouse, marriage, or divorce or annulment.
- The beneficiary or spouse stopping work or reducing hours.
- Loss of income-producing property through a disaster or other event beyond the owner’s control, not an ordinary investment loss.
- A scheduled end, termination or reorganization of an employer pension plan.
- An employer settlement payment made because of the employer’s closure, bankruptcy or reorganization.
The request is made on Form SSA-44, with documentation of the event and the income. A large one-time gain, such as a home or business sale, is not on the list; income that falls because of retirement is. The request is underused, particularly in the first year of retirement and after a spouse’s death; our guide to the first year after a spouse dies covers the second situation.
Which Income Decisions Move MAGI
Once a household is near a tier, most retirement-income decisions become Medicare decisions as well.
| Income source | Effect on IRMAA MAGI | Planning note |
|---|---|---|
| Roth conversion | Adds the taxable amount | Can be sized to a threshold, or completed before the Medicare look-back years begin |
| Long-term capital gains | Adds the gain in full | Spreading sales across years or using installment sales can limit a one-year spike |
| Required minimum distributions | Adds the distribution in full | Grows with age and balance, even with no discretionary income event |
| Tax-exempt interest | Added back | Muni income counts here even though it is untaxed |
| Qualified charitable distribution | Excluded | Available from IRAs at 70½; up to $111,000 per person in 2026 (IRS Notice 2025-67) |
| Qualified Roth IRA distribution | Excluded | Not included in gross income (IRS Publication 590-B) |
A worked example of how quickly a conversion can move a single filer: at $108,000 of MAGI, a $50,000 conversion lands at $158,000, the third row of the table. Two years later, that adds $202.90 in Part B surcharge and $37.50 in Part D surcharge, about $240 a month or $2,884.80 a year at 2026 rates, on top of the income tax on the conversion.
Two structural points follow. RMDs raise MAGI later in life, which is one reason conversions in the years before Medicare can lower long-run premiums as well as taxes. And for charitable households past 70½, the qualified charitable distribution is one of the few ways to meet an RMD without adding a dollar to MAGI; see our QCD guide.
A Hypothetical Household, Worked Through
This illustration is hypothetical and simplified. It is not based on any client and is not a recommendation. Thresholds are 2026 figures; future thresholds are adjusted for inflation and will differ.
A married couple both turn 65 in 2026, and both stop working in early 2026. Their joint 2024 MAGI, the last full year of two salaries, was $300,000. They expect 2026 MAGI of about $150,000 from a pension, dividends and part-time consulting income.
Step one: the first-year premium
Without any action, their 2026 premiums are set from $300,000 of 2024 MAGI, the $274,001–$342,000 joint tier. Each spouse pays a $202.90 Part B surcharge and a $37.50 Part D surcharge:
- Per person: $202.90 + $37.50 = $240.40 a month.
- For the couple: $240.40 × 2 = $480.80 a month, or $5,769.60 for 2026.
Stopping work is one of the qualifying events. If Social Security accepts their SSA-44 request using the $150,000 estimate for 2026, their 2026 premiums fall to the standard amount, and the $5,769.60 surcharge does not apply.
Step two: sizing a conversion
They are considering a Roth conversion in 2026, which will help set their 2028 premiums. Measured against the 2026 joint thresholds:
| 2026 conversion | 2026 MAGI | Tier | Couple’s added premium, per year at 2026 rates |
|---|---|---|---|
| $68,000 | $218,000 | Standard | $0 |
| $68,001 | $218,001 | First | ($81.20 + $14.50) × 2 × 12 = $2,296.80 |
| $124,000 | $274,000 | First | $2,296.80 |
| $124,001 | $274,001 | Second | ($202.90 + $37.50) × 2 × 12 = $5,769.60 |
The table shows why we look at thresholds before sizing a conversion. Between $68,001 and $124,000, the premium cost is the same $2,296.80, so the marginal question inside that range is purely the income tax. One more dollar beyond $124,000 adds $3,472.80 a year in premiums. If the couple also held municipal bonds, their tax-exempt interest would count toward every figure above and shrink the headroom accordingly.
A $68,000 conversion keeps this couple at the standard 2028 premium on 2026 thresholds. The $68,001st dollar costs $2,296.80, and the $124,001st costs another $3,472.80.
How We Approach This in a Plan
We treat IRMAA as one input in a multi-year income plan, weighed against income tax, not as a line to avoid at any cost. Paying a first-tier surcharge can be the right trade when a conversion moves income out of a higher future bracket.
- Taxes and conversions. We map each year’s projected MAGI against both the tax brackets and the IRMAA tiers two years out. The conversion framework is in Roth conversions: when they pay off, and the years before RMDs begin are covered in the window before required withdrawals.
- Social Security. The same income that sets IRMAA also sets how much of a Social Security benefit is taxable; see the Social Security tax torpedo.
- RMDs and giving. We project required distributions forward and, for households that give, route gifts through QCDs once eligible. The mechanics are in our RMD guide.
- Transitions. In the year of retirement, a spouse’s death or a divorce, we check whether an SSA-44 request is warranted and assemble the documents.
- Portfolio income. We account for tax-exempt interest and fund distributions when estimating MAGI, since both can move a household across a threshold without any decision being made that year.
The single-threshold mechanics are explored further in the IRMAA cliff.
Questions Worth Answering Before You Decide
- What was MAGI on the return two years before each premium year, including tax-exempt interest?
- How far is projected MAGI this year from the nearest threshold, in either direction?
- Are both spouses enrolled, doubling any surcharge?
- Has income fallen because of a qualifying event, and has an SSA-44 request been considered?
- Which planned income this year is discretionary (conversions, gains) and which is not (RMDs, pensions)?
- For charitable households past 70½, can gifts be made as QCDs?
What This Does Not Mean
- It does not mean IRMAA should decide every income choice. A surcharge of a few thousand dollars can be worth paying to lower lifetime taxes.
- It does not mean the surcharge is permanent. IRMAA is redetermined each year from newer income.
- It does not mean a one-time sale can be appealed. The list of qualifying events is specific, and a voluntary sale is not on it.
- It is not personalized advice. Projections of MAGI and premiums should be confirmed with a tax professional.
Frequently Asked Questions
Q: At what income does IRMAA start in 2026?
Above $109,000 of modified adjusted gross income for single filers and $218,000 for joint filers, measured on the 2024 tax return. At or below those levels, the Part B premium is the standard $202.90 a month.
Q: Does IRMAA apply to Medicare Advantage enrollees?
Yes. Medicare Advantage enrollees still pay the Part B premium and any Part B surcharge, and a plan with drug coverage also carries the Part D surcharge.
Q: Does tax-exempt municipal bond interest count toward IRMAA?
Yes. IRMAA uses adjusted gross income plus tax-exempt interest and a few other excluded items, so muni interest counts even though it is not taxed.
Q: Can I ask Social Security to use a more recent year’s income?
Yes, after one of a short list of qualifying events, such as stopping or reducing work, a spouse’s death, marriage, divorce, or loss of pension income. The request is made on Form SSA-44 with supporting documents.
Q: Do both spouses pay IRMAA?
Each enrolled spouse pays the surcharge, and both are measured on the same joint MAGI. Crossing $218,000 costs a couple $191.40 a month in combined Part B and D surcharges at 2026 rates.
Q: How do Roth conversions affect IRMAA?
The taxable amount of a conversion adds to MAGI in the conversion year, which generally sets premiums two years later. Conversions can be sized to a threshold or completed before the look-back years that price Medicare.
Bring the decision in front of you.
The first conversation is 30 minutes. A recent statement helps; no preparation is needed.
Sources and further reading
- CMS, 2026 Medicare Parts A & B Premiums and Deductibles (IRMAA tables)
- Medicare.gov, costs for Medicare drug coverage
- CMS, 2026 Medicare Advantage and Part D release
- CMS, 2026 Part D bid information
- 20 CFR §418.1010 (MAGI definition)
- 20 CFR §418.1135 (look-back year)
- 20 CFR §418.1205 (qualifying events)
- Medicare.gov, avoid late enrollment penalties
- Medicare.gov, working past 65
- IRS Notice 2025-67 (2026 QCD limit)
- IRS Publication 590-B
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The views and opinions expressed here are those of The Financial Sciences Company as of the publish date and are provided for informational and educational purposes only. They are not personalized investment, tax, or legal advice. The Financial Sciences Company, LLC is a registered investment adviser. Registration does not imply a certain level of skill or training. Additional information is available in our Form ADV at adviserinfo.sec.gov.
General educational information, current as of 2026. Figures and rules change. For guidance specific to your situation, speak with a qualified professional.