[The next update will be on September 11, 2025.]
Seniors 65 or older can sign up for Medicare. The government refers to people who receive Medicare as “beneficiaries.” Medicare beneficiaries must pay a premium for Medicare Part B, which covers doctors’ services, and Medicare Part D, which covers prescription drugs. The premiums paid by Medicare beneficiaries cover about 25% of the program costs for Part B and Part D. The government pays the remaining 75%.
What Is IRMAA?
Medicare imposes surcharges on higher-income beneficiaries. The theory is that higher-income beneficiaries can afford to pay more for their healthcare. Instead of doing a 25:75 split with the government, they must pay a higher share of the program costs.
The surcharge is called IRMAA, which stands for Income-Related Monthly Adjustment Amount. This applies to both Traditional Medicare (Part B and Part D) and Medicare Advantage plans.
According to the Medicare Trustees Report, 7% of Medicare Part B beneficiaries paid IRMAA. The extra premiums they paid lowered the government’s share of the total Part B and Part D expenses by two percentage points. Big deal?
History of IRMAA
IRMAA was added to Medicare by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The Republican Congress under President George W. Bush passed it in November 2003.
IRMAA started with only Part B. The Patient Protection and Affordable Care Act, passed in 2010 by the Democratic Congress under President Obama, expanded IRMAA to also include Part D.
The Bipartisan Budget Act of 2018, passed by the Republican Congress under President Trump, added a new tier for people with the highest incomes.
IRMAA has been the law of the land for over 20 years. Different congresses and administrations from different parties made small tweaks, but its structure hasn’t changed much since the beginning. IRMAA has become a bipartisan consensus. There’s no impetus for major changes.
MAGI
The income used to determine IRMAA is your Modified Adjusted Gross Income (MAGI) — which is your AGI plus tax-exempt interest and dividends from muni bonds — from two years ago. Your 2023 MAGI determines your IRMAA in 2025. Your 2024 MAGI determines your IRMAA in 2026. Your 2025 MAGI determines your IRMAA in 2027.
There are many definitions of MAGI for different purposes. The MAGI for subsidies on health insurance from the ACA marketplace includes untaxed Social Security benefits. The MAGI for IRMAA doesn’t include untaxed Social Security benefits. If you read somewhere else that says that untaxed Social Security benefits are included in MAGI, they’re talking about a different MAGI, not the MAGI for IRMAA.
You can use Calculator: How Much of My Social Security Benefits Is Taxable? to calculate the taxable portion of your Social Security benefits. The new 2025 Trump tax law didn’t change how Social Security is taxed. It didn’t change anything related to the MAGI for IRMAA. See Social Security Is Still Taxed Under the New 2025 Trump Tax Law.
As if it’s not complicated enough while not moving the needle much, IRMAA is divided into five income brackets. Depending on the income, higher-income beneficiaries pay 35%, 50%, 65%, 80%, or 85% of the program costs instead of 25%. As a result, they pay 1.4 times, 2.0 times, 2.6 times, 3.2 times, or 3.4 times the standard Medicare premium.
The threshold for each bracket can cause a sudden jump in the monthly premium amount you pay. If your income crosses over to the next bracket by $1, all of a sudden, your Medicare premiums can jump by over $1,000 per year. If you are married filing a joint tax return and both of you are on Medicare, $1 more in income can make the Medicare premiums jump by over $1,000/year for each of you.
* The last bracket on the far right isn’t displayed in the chart.
If your income is near a bracket cutoff, try to keep it low and stay in a lower bracket. Using the income from two years ago makes it more difficult to manage.
2025 IRMAA Brackets
The income on your 2023 IRS tax return (filed in 2024) determines the IRMAA you pay in 2025.
| Part B Premium | 2025 Coverage (2023 Income) |
|---|---|
| Standard | Single: <= $106,000 Married Filing Jointly: <= $212,000 Married Filing Separately <= $106,000 |
| 1.4x Standard | Single: <= $133,000 Married Filing Jointly: <= $266,000 |
| 2.0x Standard | Single: <= $167,000 Married Filing Jointly: <= $334,000 |
| 2.6x Standard | Single: <= $200,000 Married Filing Jointly: <= $400,000 |
| 3.2x Standard | Single: < $500,000 Married Filing Jointly: < $750,000 Married Filing Separately < $394,000 |
| 3.4x Standard | Single: >= $500,000 Married Filing Jointly: >= $750,000 Married Filing Separately >= $394,000 |
Source: Medicare Costs, Medicare.gov
The standard Part B premium is $185/month in 2025. Higher-income Medicare beneficiaries also pay a surcharge for Part D. The income brackets are the same. The Part D IRMAA surcharges are relatively smaller in dollars.
I also have the tax brackets for 2025. Please read 2025 Tax Brackets, Standard Deduction, Capital Gains, etc. if you’re interested.
2026 IRMAA Brackets
We have 11 data points right now out of the 12 needed for the IRMAA brackets in 2026 (based on 2024 income).
If annualized inflation in August 2025 is 0% (prices staying flat at the latest level) or 3% (approximately a 0.25% increase every month), these will be the 2026 numbers:
| Part B Premium | 2026 Coverage (2024 Income) 0% Inflation | 2026 Coverage (2024 Income) 3% Inflation |
|---|---|---|
| Standard | Single: <= $109,000 Married Filing Jointly: <= $218,000 Married Filing Separately <= $109,000 | Single: <= $109,000 Married Filing Jointly: <= $218,000 Married Filing Separately <= $109,000 |
| 1.4x Standard | Single: <= $137,000 Married Filing Jointly: <= $274,000 | Single: <= $137,000 Married Filing Jointly: <= $274,000 |
| 2.0x Standard | Single: <= $171,000 Married Filing Jointly: <= $342,000 | Single: <= $171,000 Married Filing Jointly: <= $342,000 |
| 2.6x Standard | Single: <= $205,000 Married Filing Jointly: <= $410,000 | Single: <= $205,000 Married Filing Jointly: <= $410,000 |
| 3.2x Standard | Single: < $500,000 Married Filing Jointly: < $750,000 Married Filing Separately < $391,000 | Single: < $500,000 Married Filing Jointly: < $750,000 Married Filing Separately < $391,000 |
| 3.4x Standard | Single: >= $500,000 Married Filing Jointly: >= $750,000 Married Filing Separately >= $391,000 | Single: >= $500,000 Married Filing Jointly: >= $750,000 Married Filing Separately >= $391,000 |
The projected 2026 IRMAA brackets are the same under 0% and 3% inflation in the next two months because of rounding. The numbers are different before rounding but the difference disappears after rounding.
If you’re married filing separately, you may have noticed that the bracket for 3.2x goes down with inflation. That’s not a typo. If you look up the history of that bracket (under heading C), you’ll see it went down from one year to the next. That’s the law. It puts more people married filing separately with a high income into the 3.4x bracket.
2027 IRMAA Brackets
We have no data point right now out of the 12 needed for the IRMAA brackets in 2027 (based on 2025 income). We can only make preliminary estimates and plan for some margin to stay clear of the cutoff points.
If annualized inflation from August 2025 through August 2026 is 0% (prices staying flat at the latest level) or 3% (approximately a 0.25% increase every month), these will be the 2027 numbers:
| Part B Premium | 2027 Coverage (2025 Income) 0% Inflation | 2027 Coverage (2025 Income) 3% Inflation |
|---|---|---|
| Standard | Single: <= $110,000 Married Filing Jointly: <= $220,000 Married Filing Separately <= $110,000 | Single: <= $112,000 Married Filing Jointly: <= $224,000 Married Filing Separately <= $112,000 |
| 1.4x Standard | Single: <= $139,000 Married Filing Jointly: <= $278,000 | Single: <= $141,000 Married Filing Jointly: <= $282,000 |
| 2.0x Standard | Single: <= $173,000 Married Filing Jointly: <= $346,000 | Single: <= $176,000 Married Filing Jointly: <= $352,000 |
| 2.6x Standard | Single: <= $207,000 Married Filing Jointly: <= $414,000 | Single: <= $211,000 Married Filing Jointly: <= $422,000 |
| 3.2x Standard | Single: < $500,000 Married Filing Jointly: < $750,000 Married Filing Separately < $390,000 | Single: < $500,000 Married Filing Jointly: < $750,000 Married Filing Separately < $388,000 |
| 3.4x Standard | Single: >= $500,000 Married Filing Jointly: >= $750,000 Married Filing Separately >= $390,000 | Single: >= $500,000 Married Filing Jointly: >= $750,000 Married Filing Separately >= $388,000 |
Because the formula compares the average of 12 monthly CPI numbers over the average of 12 monthly CPI numbers in a base period, even if prices stay the same in the following months, the average of the next 12 months will still be higher than the average in the previous 12 months.
To use exaggerated numbers, suppose gas prices went up from $3/gallon to $3.50/gallon over the last 12 months. The average gas price in the last 12 numbers was maybe $3.20/gallon. When gas price inflation becomes 0%, it means it stays at the current price of $3.50/gallon. The average for the next 12 months is $3.50/gallon. Brackets based on an average gas price of $3.50/gallon in the next 12 months will be higher than brackets based on an average gas price of $3.20/gallon in the previous 12 months.
If you really want to get into the weeds of the methodology for these calculations, please read this reply on comment page 2 and this other comment on page 4.
Roth Conversion Tools
When you manage your income by doing Roth conversions, you must watch your MAGI carefully to avoid accidentally crossing one of these IRMAA thresholds by a small amount and triggering higher Medicare premiums.
I use two tools to help with calculating how much to convert to Roth. I wrote about these tools in Roth Conversion with TurboTax What-If Worksheet and Roth Conversion with Social Security and Medicare IRMAA.
Nickel and Dime
The standard Medicare Part B premium is $185/month in 2025. A 40% surcharge on the Medicare Part B premium is $888/year per person or $1,776/year for a married couple both on Medicare.
In the grand scheme, when a couple on Medicare has over $212,000 in income, they’re already paying a large amount in taxes. Does making them pay another $1,776 make that much difference? It’s less than 1% of their income, but nickel-and-diming just makes people mad. People caught by surprise when their income crosses over to a higher bracket by just a small amount are angry at the government. Rolling it all into the income tax would be much more effective.
Oh well, if you are on Medicare, watch your income and don’t accidentally cross a line for IRMAA.
IRMAA Appeal
If your income two years ago was higher because you were working at that time, and now your income is significantly lower because you retired (“work reduction” or “work stoppage”), you can appeal the IRMAA initial determination. The “life-changing events” that make you eligible for an appeal include:
- Death of spouse
- Marriage
- Divorce or annulment
- Work reduction
- Work stoppage
- Loss of income from income producing property
- Loss or reduction of certain kinds of pension income
You file an appeal with the Social Security Administration by filling out the form SSA-44 to show that although your income was higher two years ago, you have a reduction in income now due to one of the life-changing events above. For more information on the appeal, see Medicare Part B Premium Appeals.
Not Penalized For Life
If your income two years ago was higher and you don’t have a life-changing event that makes you qualify for an appeal, you will pay the higher Medicare premiums for one year. The IRMAA surcharge goes into the Medicare budget. It helps to keep Medicare going for other seniors on Medicare.
IRMAA is re-evaluated every year as your income changes. If your higher income two years ago was due to a one-time event, such as realizing capital gains or taking a large withdrawal from your IRA, your IRMAA will come down automatically when your income comes down in the following year. It’s not the end of the world to pay IRMAA for one year.
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Joe Taxpayer says
Whining? Is that what you call people strategizing about how to optimize their finances?
If that’s the case, please share how you feel about the tax cut for billionaires making the lower 50% far worse off.
Hans Heijmans says
Nothing wrong with strategizing about tax planning around the existing rules. That’s what this site is for. The “whining” comment refers to the incessant complaining about the existing rules. That gets tiresome and does not add anything useful for this site.
And on tax cut for billionaires: those are ridiculous, and I am with Warren Buffett on that.
Nancy Memmel says
I didn’t write the post, so I could be dead wrong, I suppose, but I don’t think he meant the strategizing part, just the opining about how the structure “should” be in individual people’s ideal worlds. In a system where revenue is raised to subsidize some people it necessarily is at the expense of other people, and everyone has an opinion; all of which are irrelevant to the strategizing issues.
Paul says
When reading or commenting about the distribution of federal income taxes, I suggest that interested readers refer to this IRS data:
https://www.irs.gov/pub/irs-soi/22in41ts.xls
It has information about the total income, total federal income tax paid, average tax rate, the share of total income, and the share of total federal income tax… for successively larger cohorts, starting at the top 0.001%, to the top 50%. Note that each column is inclusive of the taxpayers in the columns to the left, but if you have any skills in Excel, you can easily create a similar table that separates each percentile into brackets.
Data is provided for tax years 2001 – 2022. A new version including tax year 2023 should be published soon.
If you want to consider all federal taxes (individual income, corporate income, social insurance, excise), the Congressional Budget Office has published that data, broken into quintiles, from 1979-2020:
https://www.cbo.gov/publication/59509
The Supplemental Data section has the Excel workbooks that back up the report. I will caution that it is not easily comprehended unless you are skilled in Excel, specifically with Pivot Tables.
If you are really interested in this subject, I recommend taking the time to look at this data. You will likely be surprised, as it belies the usual consensus.
TwoGeez says
It saddens me to see Harry’s excellent site being hijacked by these arguments. It sounds more like a Reddit thread (which would better be held there). Can we PLEASE get back to comments and explanations that can help us all manage against the IRMAA thresholds? /offmysoapbox
Deb says
Am I understanding that the income threshold for my 2027 IRMAA (calculated based on my 2025 MAGI) will be higher than $212K? I am close to that now and would like to know that I have some breathing room. You think it will be over $218K. Thank you
Henry Waldron says
The 2026 IRMAA threshold, referenced to 2024 MAGI, will likely be $218,00 for a couple filing jointly, half that amount for a single taxpayer.
It could be slightly higher or lower if something calamitous happens to inflation between now and October. Since the single taxpayer number is rounded, I’m not sure how crazy the changes would need to be. I’m also not sure what might happen if we suddenly don’t get monthly updates, or if some alternative formula is suddenly introduced.
The 2027 IRMAA threshold, referenced to current (2025) MAGI, would normally be higher than the 2026 threshold. How much depends upon the inflation over the next year starting in October 2025. At 2% inflation, the $218,000 applied in 2026 MAGI would go to ~ $222,000 applied to 2027 MAGI
The Wizard says
As you can see from the chart for 2025 income, the first IRMAA tier is projected to start for MFJ MAGI of $220k if zero inflation for next 13 months, or $224k if 3% inflation.
We’ll know a bit more by mid December, which gives folks time to figure their Roth conversion amount for the year or, in some cases, their QCD amount…
GeezerGeek says
After we get the November CPI reports, which is due to be released on December 10, I will create an IRMAA bracket inflation threshold report that will show what rate of inflation will be needed for a bracket limit to change. A hypothetical example of this would be it would take 3.15% inflation rate for the bracket limit to change from $212K to $214K. It will show you how much or little breathing room you have for 2025 income that will determine the 2027 IRMAAs.
I wish this Comments section would support images or tables. That would make it easier to post the report but I’ll probably have to provide a link to an image so that everyone can view the report.
LIftLock says
GeezerGeek,
If you post the inflation sensitivity thresholds like you did last year, I will put in a spreadsheet and share it with everyone like I did last year.
GeezerGeek says
Liftlock,
Thanks for offering to help, but I copied the numbers out of a spreadsheet to paste them into Comments and then tried to format them into something readable in the Comments section. So, it is no more work for me to publish the spreadsheet that I initially created. I’ll probably also save a CSV of the spreadsheet and paste that into Comments so that others who are too cautious to click on a link can paste that into their own spreadsheet.
Jerry says
Thank you for the article, it helps to plan to avoid IRMAA premiums.
Ron says
I would like to know who authorized the IRS to disclose our confidential tax information to Medicare and Social Security who acts as Medicares collection agent. If another agency came to the IRS and said that their fees are tied to income, would the IRS provide this information to them also? Where would it end?
Harry Sit says
Congress authorized it. They passed a law and the President signed it. Both the Secretary of the Treasury and the Commissioner of Social Security are tasked to implement the law. It’ll happen again if Congress passes another law that requires payments based on income and the President signs it. It would end when Congress stops passing such laws.
Harry Sit says
I added a new History section to the main post to outline how we got here. From the summary of the original law that brought us IRMAA:
“Subtitle B: Income-Related Reduction in Part B Premium Subsidy – (Sec. 811)
… …
Amends the Internal Revenue Code to direct the Secretary of the Treasury, upon written request from the Commissioner of Social Security, to make appropriate disclosure of tax return information to carry out the Medicare part B premium subsidy adjustment.”
There you go. Congress explicitly mandated the disclosure.
The Wizard says
The US Government allowed that.
Please relax and get off your high horse…