To calculate your MAGI for IRMAA, take the adjusted gross income from Line 11 of your Form 1040, add the tax-exempt interest from Line 2a, and add back any foreign earned income you excluded on Form 2555. That total is the figure Medicare uses to decide whether you owe a Part B and Part D surcharge, and which tier you land in.
The Formula Medicare Uses
Federal law defines this version of MAGI in 42 U.S.C. § 1395r(i)(4). It has three possible components, and most people only deal with the first two.
- Adjusted gross income (AGI). Form 1040, Line 11. This captures wages, pensions, retirement account distributions, investment income, capital gains, rental income, the taxable portion of Social Security benefits, and everything else after above-the-line deductions like IRA contributions and student loan interest. Your standard or itemized deductions do not reduce it.
- Tax-exempt interest. Form 1040, Line 2a. Interest from municipal bonds and certain bond funds that escapes federal income tax still counts here. The IRS doesn’t tax it; Medicare counts it anyway.
- Foreign earned income exclusion. If you used Form 2555 to exclude income earned abroad, that excluded amount gets added back. The statute also adds back income excluded under IRC sections 931 and 933, which cover residents of Guam, American Samoa, and Puerto Rico. Most domestic filers can ignore this line.
You don’t report the total anywhere. The Social Security Administration gets these figures directly from the IRS, runs the same addition, and slots you into a bracket based on the result.
Step by Step, With Numbers
Pull up the tax return SSA will actually use (which is not necessarily last year’s — see the timing section below). Then:
- Step 1: Write down your AGI from Line 11.
- Step 2: Write down your tax-exempt interest from Line 2a. If the line is blank, use zero.
- Step 3: If you filed Form 2555, write down the excluded amount. Otherwise skip.
- Step 4: Add the three numbers. The result is your IRMAA MAGI.
A worked example. You’re a single filer with an AGI of $125,000, tax-exempt municipal bond interest of $8,000, and no foreign income exclusion. Your MAGI is $125,000 + $8,000 = $133,000. That places you in the first IRMAA tier for 2026, which adds $81.20 per month to your Part B premium and $14.50 to Part D. If your muni interest had been $4,000 instead, MAGI would be $129,000, still the same tier. With zero muni interest, the $125,000 AGI alone would still put you over the $109,000 single-filer threshold.
The tax-exempt interest step is where most miscalculations happen. Income that produces no tax bill still counts toward Medicare’s number.
Which Tax Year SSA Is Actually Using
SSA sets your premiums with a two-year look-back. Your 2026 premiums are based on the MAGI from your 2024 return, filed in early 2025. The lag exists because the IRS needs time to process and verify returns before sharing the data.
If your 2024 return isn’t available when SSA makes its determination, the agency falls back to your 2023 return. Once the newer return is on file, you can ask SSA to use it by calling 1-800-772-1213.
So when you sit down to run the formula, run it on the return SSA is actually looking at, not the most recent one you filed. For 2026 premiums that’s the 2024 return; for 2027 it will be 2025; for 2028 it will be 2026.
Income Sources That Quietly Push MAGI Up
Because MAGI starts from AGI, every dollar of taxable income matters. A few sources catch retirees off guard.
Roth conversions. When you convert money from a traditional IRA or 401(k) to a Roth, the converted amount counts as taxable income in the conversion year. A $150,000 Roth conversion in 2024 lands on your 2024 AGI, which is exactly the return SSA uses to set 2026 premiums. People who do large conversions in early retirement to reduce future required minimum distributions sometimes don’t realize they’ve triggered two or three years of IRMAA surcharges in the process.
Capital gains from selling a home. Single filers can exclude up to $250,000 of gain on a primary residence sale, and joint filers up to $500,000. Any gain above those limits hits your AGI. A long-held home in a strong market can produce a taxable gain that pushes MAGI well past the first threshold for a single year.
Required minimum distributions. RMDs generally grow over time as balances rise and life expectancy factors shrink. A larger-than-expected RMD in a good market year can nudge MAGI into a higher bracket.
Social Security benefits. The taxable portion of your benefits (Line 6b) flows into AGI on Line 11. For most Medicare beneficiaries with other income, up to 85% of Social Security ends up taxable, and that share is already inside the MAGI figure.
Where the 2026 Thresholds Start
Once you have your MAGI, compare it to the first-tier threshold for your filing status. For 2026:
- Single filer: $109,000 or less, no surcharge; you pay the standard Part B premium of $202.90 per month.
- Joint filer: $218,000 or less, no surcharge.
- Married filing separately, having lived with your spouse at any point in the tax year: the $109,000 threshold still applies, but the bracket structure collapses. Crossing that line jumps you straight to a Part B surcharge of $446.30 and a Part D surcharge of $83.30, the same level a single filer wouldn’t hit until MAGI exceeds $205,000. If you lived apart from your spouse for the entire tax year, you’re treated as a single filer with the full six-tier structure, provided you confirm the separation on your return.
Above the first threshold, surcharges climb through five tiers for both Part B and Part D, topping out at MAGI of $500,000 for a single filer and $750,000 for a joint filer. Roughly 8% of Part B beneficiaries fall into one of these tiers.
The brackets work as hard cliffs, not gradual slopes. A single filer at $109,000 pays no surcharge; a filer at $109,001 pays $81.20 per month for Part B and $14.50 for Part D, roughly $1,148 over the following year from a single dollar of income. If your projected MAGI is hovering near a threshold, deferring a capital gain, trimming a Roth conversion, or making a qualified charitable distribution from an IRA can keep you in the lower tier.
When a Life Event Lets You Skip the Two-Year Wait
If your income has dropped because of a major life event, you don’t have to wait for the look-back to catch up. SSA will recalculate IRMAA based on more recent income for eight qualifying events:
- Marriage
- Divorce or annulment
- Death of a spouse
- Work stoppage (full retirement or job loss)
- Work reduction (moving to part-time or lower-paying work)
- Loss of income-producing property (from a disaster, theft, or fraud)
- Loss of pension income
- Employer settlement payment, typically from employer bankruptcy
File Form SSA-44 with documentation of the event: an employer statement or pay stubs for a retirement, a death certificate for a spouse’s death, a plan administrator letter for a pension reduction. You can also call SSA at 1-800-772-1213 instead of mailing the form. The event must have actually caused your income to decrease, and its date must fall in the same year or earlier than the tax year you’re asking SSA to use. Approved adjustments can be retroactive, sometimes producing refunds for months you overpaid.
If you filed an amended return that changes MAGI for a year SSA already used, call SSA to request a new determination based on the corrected figures.