Around 92% of all Medicare recipients pay the standard monthly Medicare Part B and Part D premiums. However, those with an annual Modified Adjusted Gross Income (MAGI) over a certain amount may have to pay surcharges on top of their standard premiums. This is known as Medicare’s Income-Related Monthly Adjustment Amount (IRMAA).
The IRMAA penalty depends on your MAGI and your tax filing status.
IRMAA for Medicare Part B
All Medicare subscribers—including those on Medicare Advantage plans—pay monthly Medicare Part B premiums. The base premium for 2026 is 202.90 (up from $185 in 2025). However, IRMAAs will kick in if your MAGI is above a certain amount. The table below shows these potential increases.
IRMAA for Medicare Part D
Medicare Part D prescription drug coverage is offered by private health insurers, so monthly premiums will vary depending on the chosen option. However, IRMAAs on top of monthly premiums do apply if your MAGI is above a certain level. The chart below shows these potential amounts.
What counts as MAGI?
Even retired Medicare subscribers can be be subject to IRMAAs if their income from all sources is over a certain threshold.
In addition to income from a part-time job or self-employment income, MAGI also counts as income:
- Required Minimum Distributions or elective withdrawals made from Traditional IRAs or pre-tax 401(k) or other employer retirement plan accounts.
- If applicable, the taxable portion of monthly Social Security payments.
- Ordinary income and capital gains from bank accounts and taxable investment accounts.
- The taxable portion of annuity payments.
To calculate IRMAAs, the IRS uses your tax forms from two years before. This can be a problem if you were still working full-time back then and this outdated salary might elevate you into one of the IRMAA brackets when you sign up for Medicare.
Fortunately, relief may be available. The new tax break that allows seniors to deduct $5,000 from their MAGI ($10,000 for joint filers) may reduce their IRMAA risk.
And if you’ve retired or gone through a life-changing event that has significantly reduced your MAGI, you can appeal an IRMAA decision by submitting Form SSA-44 to the Social Security Administration along with proof of your income reduction.
If you anticipate being subject to an IRMAA in 2026, you may want to speak to a tax professional or financial advisor to discuss strategies to potentially reduce your IRMAA risk.
This material has been provided for general informational purposes only and does not constitute tax advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax professional on any tax-related issues.
This article was authored by Martin Baker and Jeffrey Briskin. Martin is a financial advisor and Director of Financial Planning with Canby Financial Advisors, a SEC-registered investment adviser. SEC registration does not constitute an endorsement by the SEC nor a statement about any skill or training. Martin can be reached at 508.598.1082 or mbaker@canbyfinancial.com. Jeffrey Briskin is Director of Marketing at Canby Financial Advisors.
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