What is IRMAA, and how does it work?

It is a cliff, not a ramp. This is the single most important thing to understand. Cross a threshold by one dollar and you pay that entire tier’s surcharge — there is no phase-in, no marginal rate. Someone $1 over the first 2026 line pays $1,148.40 more over the year than someone a dollar below it.

The income year is already gone. By the time the surcharge appears, the return that caused it is two years old and unchangeable. What you can still influence is the premium two years from now — which is why IRMAA is a planning problem rather than a bill to react to.

One unusual year is enough. A Roth conversion, selling a property, an inherited IRA, a large capital gain, even a lump-sum pension payment — any of these can push you over a line for one year. The surcharge follows two years later, applies for twelve months, then unwinds.

The full range is wide. At the top tier in 2026, IRMAA adds $6936.00 a year per person on top of standard premiums. At the first tier it is $1148.40. For a couple, both spouses pay it separately.

IRMAA uses modified adjusted gross income: your adjusted gross income plus tax-exempt interest. In practice that means it counts most of what you might not expect it to.

Social Security sends an Initial IRMAA Determination Notice when a surcharge applies, normally toward the end of the year before it starts. It names the tax year used and the bracket it put you in — worth checking, because the wrong year is one of the more common errors.

If you already receive Social Security, the surcharge is deducted from that payment alongside your standard premium. If you are not yet claiming, Medicare bills you directly. Part D IRMAA is paid to Medicare, not to your drug plan, even though the plan premium itself goes to the insurer.

See medicare.gov on the determination notice.

Sometimes. If your income has fallen because of a life-changing event — retirement or reduced work hours, the death of a spouse, marriage or divorce, loss of a pension, loss of income-producing property — you can ask Social Security to use a more recent year instead of the two-year-old return, using Form SSA-44.

Simply having a high-income year does not qualify. The rule is aimed at circumstances that changed your income going forward, not at one-off gains. A Roth conversion or a property sale is not a life-changing event, however much it raised your MAGI.

Otherwise the lever is timing: managing which year income lands in, so it does not push you over a line. We have worked through what actually reduces IRMAA and what does not, with the cost of crossing each threshold — the number that decides whether a tactic is worth it.