IRMAA is based on modified adjusted gross income, not adjusted gross income. For Medicare purposes, MAGI is your AGI plus your tax-exempt interest, and the Social Security Administration pulls both numbers straight from your federal tax return. That difference matters most for retirees holding municipal bonds: the interest is free from federal income tax, but it still counts toward the income figure that decides whether you pay a Part B and Part D surcharge.1Social Security Administration. POMS HI 01101.010 – Modified Adjusted Gross Income (MAGI)
How MAGI Is Calculated for IRMAA
The MAGI used for IRMAA equals two numbers from IRS Form 1040: your adjusted gross income on line 11, plus your tax-exempt interest on line 2a.1Social Security Administration. POMS HI 01101.010 – Modified Adjusted Gross Income (MAGI) Tax-exempt interest most commonly comes from municipal bonds. It never appears in AGI, which is why people who plan around AGI alone can be surprised by their Medicare premium notice.
The federal statute adds a few less common items back into the calculation as well: foreign earned income excluded from AGI, income from U.S. territories such as Puerto Rico or American Samoa, and certain education savings bond interest.2Office of the Law Revision Counsel. 42 USC 1395r – Amount of Premiums for Individuals Enrolled Under This Part Most beneficiaries don’t touch any of those. For them, MAGI is simply AGI plus tax-exempt interest. There is no separate form to file. The IRS sends the data to Social Security directly.
Why the MAGI on Your Notice Is Two Years Old
Your 2026 IRMAA is calculated from the tax return you filed for 2024.3Medicare.gov. 2026 Medicare Costs Social Security always uses a two-year lookback because the IRS needs time to process returns and transmit finalized data. By the time your premium is set, the most recent complete tax year on file is roughly two years back.
The practical consequence is a lag in both directions. A big income year you’ve already moved past can still drive a surcharge later. And a mid-year retirement, a property sale, or a large Roth conversion won’t reach your Medicare premium in real time. If your income has genuinely dropped for a reason Social Security recognizes, you can ask the agency to use a more recent year instead.
What Crossing a MAGI Threshold Costs in 2026
IRMAA is a cliff, not a slope. Once your MAGI crosses a bracket, you pay the full surcharge for that tier — exceeding a threshold by a single dollar is enough.4Social Security Administration. POMS HI 01101.020 – IRMAA Sliding Scale Tables The 2026 standard Part B premium is $202.90.5Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles The single filer threshold for any surcharge is $109,000; for joint filers, $218,000.
Part B Surcharges Based on 2024 MAGI
- $109,000 or less single / $218,000 or less joint: no surcharge, $202.90 total
- $109,001–$137,000 / $218,001–$274,000: $81.20 surcharge, $284.10 total
- $137,001–$171,000 / $274,001–$342,000: $202.90 surcharge, $405.80 total
- $171,001–$205,000 / $342,001–$410,000: $324.60 surcharge, $527.50 total
- $205,001–$499,999 / $410,001–$749,999: $446.30 surcharge, $649.20 total
- $500,000 or more / $750,000 or more: $487.00 surcharge, $689.90 total
Part D Surcharges Based on 2024 MAGI
Part D IRMAA is added on top of whatever premium your private drug plan charges, but you pay the surcharge to Medicare rather than to the plan.
- $109,000 or less single / $218,000 or less joint: no surcharge
- $109,001–$137,000 / $218,001–$274,000: $14.50
- $137,001–$171,000 / $274,001–$342,000: $37.50
- $171,001–$205,000 / $342,001–$410,000: $60.40
- $205,001–$499,999 / $410,001–$749,999: $83.30
- $500,000 or more / $750,000 or more: $91.00
At the top bracket, combined Part B and Part D IRMAA reaches $578.00 per month before any drug plan premium.5Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
Married Filing Separately Has Its Own Schedule
Joint filers get roughly double the single-filer thresholds. Married beneficiaries who lived with a spouse at any point during the year but filed separately do not. For 2026, that filing status has only three tiers:
- $109,000 or less: no surcharge
- $109,001–$390,999: $446.30 Part B surcharge ($649.20 total) and $83.30 Part D surcharge
- $391,000 or more: $487.00 Part B surcharge ($689.90 total) and $91.00 Part D surcharge
Crossing $109,000 under this filing status skips straight to the second-highest surcharge level.5Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
If Your MAGI Has Dropped Since the Lookback Year
Because the number on your notice is two years old, it may no longer reflect your actual income. Social Security will use a more recent year if you’ve had one of these life-changing events:6Social Security Administration. Request to Lower an Income-Related Monthly Adjustment Amount (IRMAA)
- Marriage
- Divorce or annulment
- Death of a spouse
- Work stoppage or a reduction in work hours (yours or your spouse’s)
- Loss of income-producing property due to disaster, arson, fraud, or theft (not a voluntary sale)
- Loss of pension income from a plan termination or reorganization
- An employer settlement payment tied to bankruptcy or reorganization
To request the change, file Form SSA-44. You can submit it online through your my Social Security account, or by fax or mail to a local Social Security office. The form asks for the event, the date, your estimated MAGI for the more recent year, and supporting documentation such as a letter from a former employer or a death certificate.7Social Security Administration. Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event (SSA-44) The event must have occurred in or before the tax year you’re asking the agency to use.
Income Spikes That Don’t Qualify
Only the events listed above trigger a recalculation. Common income events that raise MAGI but do not qualify include:
- Roth IRA conversions, which count as taxable income in the year of conversion
- Large IRA or 401(k) withdrawals, including required minimum distributions
- Capital gains from selling a home or investments above the exclusion
- Sale of a business
- Taxable distributions from an inherited IRA
If your MAGI jumped for one of these reasons, the higher IRMAA stands for the full year, and the only way to bring it back down is to manage MAGI in future tax years.
If the MAGI Figure Itself Is Wrong
If you believe Social Security used the wrong income figure, or your amended tax return produces a lower MAGI, you can ask the agency to use the corrected numbers. You’ll need the amended return plus either an IRS receipt letter or a transcript showing the updated information. The request has to be made within three calendar years after the close of the tax year covered by the amended return.8Social Security Administration. POMS HI 01120.045 – Use of Amended Income Tax Returns
You can also file a formal appeal. The first step is a reconsideration request, filed within 60 days of the date you receive your IRMAA determination notice; Social Security treats the notice as received five days after it was mailed.9Social Security Administration. POMS HI 01140.001 – Overview of the Appeals Process for the Income-Related Monthly Adjustment Amount (IRMAA) Later stages exist — an Administrative Law Judge hearing, the Medicare Appeals Council, and federal district court — but most IRMAA disputes are resolved earlier.