Do Seniors Pay Taxes on IRA Withdrawals? RMDs and Medicare

Yes, seniors generally pay federal income tax on withdrawals from a traditional IRA, because the money went in pre-tax and the IRS collects when it comes out. Qualified Roth IRA withdrawals, by contrast, are tax-free. The bigger surprise for most retirees is what a traditional IRA distribution does around it: the added income can make part of your Social Security benefit taxable and can push your Medicare premiums higher two years later.

Traditional IRA Withdrawals Are Ordinary Income

Every dollar you pull from a traditional IRA is treated as ordinary income, taxed at the same rates as wages.¹ Both your original contributions and the growth are fully taxable, since you or your employer already took the deduction on the way in.

Your rate depends on your total taxable income for the year. For 2026, a single filer’s federal brackets run:

10% up to $12,400
12% from $12,401 to $50,400
22% from $50,401 to $105,700
24% from $105,701 to $201,775
32% from $201,776 to $256,225
35% from $256,226 to $640,600
37% over $640,600

For married couples filing jointly, each threshold is roughly doubled — the 22% bracket starts at $100,801 and the 24% bracket at $211,401.² A large distribution can push you into a higher bracket, so timing and size matter.

When Part of the Withdrawal Is Not Taxable

If you ever made nondeductible contributions (after-tax money you did not claim as a deduction), a slice of each withdrawal represents a return of those already-taxed dollars and is not taxed again. You cannot pick which slice, though. A pro-rata rule divides your total nondeductible contributions by the combined balance of all your traditional IRAs to find the tax-free percentage of any distribution.¹ So if you have $20,000 in nondeductible contributions and $200,000 total across your traditional IRAs, only 10% of any withdrawal comes out tax-free. You track this basis on Form 8606.

Roth IRA Withdrawals Are Different

You paid tax on Roth contributions going in, so qualified distributions come out completely tax-free. To qualify, you must be at least 59½ and the account must have been open for at least five tax years.³ The five-year clock starts January 1 of the first tax year you made any Roth contribution. Open the account at 62 and you still wait until 67 for the earnings to be fully tax-free, even though you cleared the age test years earlier.

Your direct contributions come out first under Roth ordering rules and are always tax-free, since you already paid the tax.³ Only the earnings face income tax if a distribution is not qualified.

Roth IRAs also carry no required minimum distributions during the owner’s lifetime.⁴ You can leave the balance to grow untouched for as long as you live.

Required Minimum Distributions Start at 73

Federal law does not let you leave money in a traditional IRA indefinitely. Starting at age 73, you must take a required minimum distribution (RMD) each year, and the age moves to 75 beginning in 2033.⁴ Whether or not you need the cash, the withdrawal is mandatory and fully taxable as ordinary income.

How the RMD Is Calculated

Your RMD equals your traditional IRA balance on December 31 of the prior year divided by a life expectancy factor from the IRS Uniform Lifetime Table. At age 73, the factor is 26.5, so a $500,000 balance produces an RMD of about $18,868. At age 80, the factor falls to 20.2, so the same balance produces a larger required withdrawal.⁵ If your spouse is both the sole beneficiary and more than 10 years younger, you use the Joint Life and Last Survivor Expectancy Table instead, which yields a smaller amount.⁶

The First-Year Deadline Trap

You can delay your very first RMD until April 1 of the year after you turn 73. That sounds generous, but your second RMD is still due by December 31 of that same year. Delaying stacks two taxable distributions into one calendar year and can push you into a higher bracket.⁴ After year one, every RMD must be taken by December 31.

The Penalty for Missing an RMD

Take less than required and the IRS imposes a 25% excise tax on the shortfall. The rate drops to 10% if you correct the shortfall within the correction window, which generally runs through the end of the second tax year after the penalty is imposed.⁷

How an IRA Withdrawal Can Tax Your Social Security

Traditional IRA distributions can drag part of your Social Security benefit into the taxable column. The IRS uses “provisional income” — roughly your adjusted gross income plus nontaxable interest plus half your Social Security benefits — to decide how much of the benefit is taxable. An IRA withdrawal raises your adjusted gross income directly, which raises provisional income.

For single filers, once provisional income exceeds $25,000, up to 50% of Social Security becomes taxable; above $34,000, up to 85%. For joint filers, the thresholds are $32,000 and $44,000.⁸ These thresholds are not indexed for inflation.

A quick illustration: you collect $20,000 in Social Security and take a $30,000 traditional IRA distribution. As a single filer, your provisional income is at least $40,000, and up to 85% of your benefits become taxable. Roth withdrawals do not count toward provisional income, which is one reason some retirees convert traditional funds to a Roth before claiming Social Security.

How an IRA Withdrawal Can Raise Your Medicare Premiums

Traditional IRA distributions also feed into the Income-Related Monthly Adjustment Amount (IRMAA) that Medicare adds to Part B and Part D premiums for higher-income beneficiaries. Medicare looks back two years, so your 2026 premiums are set from your 2024 tax return.⁹

At or below $109,000 (single) or $218,000 (joint) in 2024, you pay the standard 2026 Part B premium of $202.90 per month and no Part D surcharge. Above those thresholds, surcharges apply in tiers:

$109,001–$137,000 single / $218,001–$274,000 joint: Part B +$81.20; Part D +$14.50
$137,001–$171,000 single / $274,001–$342,000 joint: Part B +$202.90; Part D +$37.50
$171,001–$205,000 single / $342,001–$410,000 joint: Part B +$324.60; Part D +$60.40
$205,001–$499,999 single / $410,001–$749,999 joint: Part B +$446.30; Part D +$83.30
$500,000+ single / $750,000+ joint: Part B +$487.00; Part D +$91.00

¹⁰

At the top tier, a single filer pays an extra $6,936 per year in combined surcharges. Because of the two-year lookback, a large one-time IRA withdrawal or Roth conversion this year will not touch your Medicare bill until two years out.

Ways to Reduce the Tax Hit

Qualified Charitable Distributions

If you are at least 70½ and give to charity, a qualified charitable distribution (QCD) lets you send money directly from your traditional IRA to an eligible charity without it counting as taxable income. For 2026, you can exclude up to $111,000 in QCDs from gross income.¹¹ The transfer must move directly from your IRA custodian to the charity; you cannot withdraw first and then donate.

A QCD also counts toward your RMD for the year.¹² A $20,000 RMD satisfied by a $20,000 QCD leaves you with no income tax on the amount, keeps that dollar out of your provisional income for Social Security purposes, and keeps it out of the modified adjusted gross income figure that drives IRMAA.

The Enhanced Senior Deduction

For tax years 2025 through 2028, seniors 65 and older can claim an additional deduction of up to $6,000 ($12,000 for joint filers where both spouses qualify). It sits on top of the existing additional standard deduction for seniors and is available whether you itemize or take the standard deduction.¹³

The deduction phases out above $75,000 modified adjusted gross income for single filers and $150,000 for joint filers. Because traditional IRA withdrawals lift that number, a large distribution can trim or wipe out this benefit. At modest income levels, it can offset a meaningful share of the tax on your withdrawal.

Withholding and Estimated Tax

On a one-time or irregular traditional IRA withdrawal, your custodian withholds 10% for federal tax by default; you can pick any rate from 0% to 100% on Form W-4R.¹⁴ For scheduled periodic payments, withholding is set through Form W-4P, similar to a paycheck.

If your actual tax rate outruns what is being withheld, quarterly estimated payments may be needed to avoid an underpayment penalty. The safe harbor: cover at least 90% of your current-year tax, or 100% of last year’s tax (110% if prior-year adjusted gross income exceeded $150,000), through withholding plus estimates combined.¹⁵ A common shortcut is asking your custodian to withhold a higher percentage on each distribution instead of filing quarterly.

State Taxes Vary

State treatment of IRA withdrawals is separate from federal and differs sharply. Some states tax distributions at their regular income rates, with top rates roughly from 2% to over 10%. About a dozen states do not tax IRA or 401(k) distributions at all, and several more have no state income tax. Others exempt a fixed dollar amount of retirement income or provide an age-based credit. Because these rules change often, confirm the specifics with your state’s revenue or tax agency before planning a large withdrawal.

1
Internal Revenue Service. Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)
2
Internal Revenue Service. Tax Inflation Adjustments for Tax Year 2026
3
Office of the Law Revision Counsel. 26 USC 408A – Roth IRAs
4
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
5
Internal Revenue Service. Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)
6
Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
7
Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans
8
Office of the Law Revision Counsel. 26 USC 86 – Social Security and Tier 1 Railroad Retirement Benefits
9
Medicare.gov. 2026 Medicare Costs
10
Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
11
Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living
12
Internal Revenue Service. Retirement Plans FAQs Regarding IRAs Distributions (Withdrawals)
13
Internal Revenue Service. 2026 Filing Season Updates and Resources for Seniors
14
Internal Revenue Service. 2026 Form W-4R
15
Internal Revenue Service. Estimated Tax