[The next update will be on May 12, 2026, when the government publishes the CPI data for April 2026.]
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 a Medicare Trustees Report, 7% of Medicare Part B beneficiaries paid IRMAA. The extra premiums they paid reduced 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 2024 MAGI determines your IRMAA in 2026. Your 2025 MAGI determines your IRMAA in 2027. Your 2026 MAGI determines your IRMAA in 2028.
There are many definitions of MAGI for different purposes. The MAGI for ACA health insurance subsidies includes 100% of the Social Security benefits. The MAGI for IRMAA includes taxable Social Security benefits but it 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, 2.0, 2.6, 3.2, or 3.4 times the standard Medicare premium.
The threshold for each bracket can cause a sudden increase in the monthly premium amount you pay. If your income crosses into the next bracket by $1, your Medicare premiums can suddenly jump by over $1,000 per year. If you are married and filing a joint tax return, and both of you are on Medicare, $1 more in income can make 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.
2026 IRMAA Brackets
The standard Part B premium in 2026 is $202.90 per person per month. The income on your 2024 federal tax return (filed in 2025) determines the IRMAA you pay in 2026.
| Part B Premium | 2026 Coverage (2024 Income) |
|---|---|
| Standard | Single: <= $109,000 Married Filing Jointly: <= $218,000 Married Filing Separately <= $109,000 |
| 1.4x Standard | Single: <= $137,000 Married Filing Jointly: <= $274,000 |
| 2.0x Standard | Single: <= $171,000 Married Filing Jointly: <= $342,000 |
| 2.6x Standard | Single: <= $205,000 Married Filing Jointly: <= $410,000 |
| 3.2x Standard | 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 |
Source: CMS news release
Higher-income Medicare beneficiaries also pay a surcharge for Part D. The IRMAA income brackets are the same for Part B and Part D. The Part D IRMAA surcharges are relatively lower in dollars.
I also have the tax brackets for 2026. Please read 2026 Tax Brackets, Standard Deduction, Capital Gains, QCD if you’re interested.
2027 IRMAA Brackets
We have six data points right now out of the 11 needed for the IRMAA brackets in 2027 (based on 2025 income).
If annualized inflation from April 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: <= $112,000 Married Filing Jointly: <= $224,000 Married Filing Separately <= $112,000 | Single: <= $112,000 Married Filing Jointly: <= $224,000 Married Filing Separately <= $112,000 |
| 1.4x Standard | Single: <= $141,000 Married Filing Jointly: <= $282,000 | Single: <= $141,000 Married Filing Jointly: <= $282,000 |
| 2.0x Standard | Single: <= $175,000 or $176,000* Married Filing Jointly: <= $350,000 or $352,000* | Single: <= $176,000 Married Filing Jointly: <= $352,000 |
| 2.6x Standard | Single: <= $210,000 Married Filing Jointly: <= $420,000 | Single: <= $211,000 Married Filing Jointly: <= $422,000 |
| 3.2x Standard | Single: < $500,000 Married Filing Jointly: < $750,000 Married Filing Separately < $388,000 | 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 >= $388,000 | Single: >= $500,000 Married Filing Jointly: >= $750,000 Married Filing Separately >= $388,000 |
Some of the projected 2027 brackets are the same for 0% inflation and 3% inflation due to rounding. The unrounded numbers for 3% inflation are higher, but not high enough to break into the next level after rounding.
If you’re married filing separately, you may have noticed that the 3.2x bracket 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.
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.
The Missing October 2025 CPI
The government did not and will not publish the CPI number for October 2025, because it didn’t collect the necessary price data during a government shutdown. It’s unclear how the Social Security Administration will calculate the 12-month average with only 11 data points.
The Treasury Department used 325.604 as the October CPI to calculate interest on inflation-indexed Treasury bonds. The Social Security Administration won’t necessarily use the same number for IRMAA. I calculated the projected 2027 brackets in two ways: (a) using a straight average of the projected 11 monthly data points, omitting October 2025; and (b) using 325.604 for October 2025. The projected 2027 brackets are largely the same under the two methods due to rounding. I put an asterisk where they differ.
2028 IRMAA Brackets
We have no data point right now out of the 12 needed for the IRMAA brackets in 2028 (based on 2026 income). We can only make preliminary estimates and plan for some margin to stay clear of the cutoff points.
If annualized inflation from April 2026 through August 2027 is 0% (prices staying flat at the latest level) or 3% (approximately a 0.25% increase every month), these will be the 2028 numbers:
| Part B Premium | 2028 Coverage (2026 Income) 0% Inflation | 2028 Coverage (2026 Income) 3% Inflation |
|---|---|---|
| Standard | Single: <= $113,000 Married Filing Jointly: <= $226,000 Married Filing Separately <= $113,000 | Single: <= $116,000 Married Filing Jointly: <= $232,000 Married Filing Separately <= $116,000 |
| 1.4x Standard | Single: <= $142,000 Married Filing Jointly: <= $284,000 | Single: <= $146,000 Married Filing Jointly: <= $292,000 |
| 2.0x Standard | Single: <= $177,000 Married Filing Jointly: <= $354,000 | Single: <= $182,000 Married Filing Jointly: <= $364,000 |
| 2.6x Standard | Single: <= $212,000 Married Filing Jointly: <= $424,000 | Single: <= $218,000 Married Filing Jointly: <= $436,000 |
| 3.2x Standard | Single: < $504,000 Married Filing Jointly: < $756,000 Married Filing Separately < $391,000 | Single: < $516,000 Married Filing Jointly: < $774,000 Married Filing Separately < $400,000 |
| 3.4x Standard | Single: >= $504,000 Married Filing Jointly: >= $756,000 Married Filing Separately >= $391,000 | Single: >= $516,000 Married Filing Jointly: >= $774,000 Married Filing Separately >= $400,000 |
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 $202.90/month in 2026. A 40% surcharge on the Medicare Part B premium is $974/year per person or $1,948/year for a married couple both on Medicare.
In the grand scheme, when a couple on Medicare has over $218,000 in income, they’re already paying a large amount in taxes. Does making them pay another $2,000 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 into 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 Form SSA-44 to show that although your income was higher two years ago, you have a reduced 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 decrease automatically when your income comes down in the following year. It’s not the end of the world to pay IRMAA for one year.
Learn the Nuts and Bolts
I put everything I use to manage my money in a book. My Financial Toolbox guides you to a clear course of action.
Bob says
Jeff. The IRS must have included on form 1040 the “QCD” checkbox, as well as the IRA “Rollover” checkbox, for a reason. At least that seems to be the point with respect to the 2025 1040 return, given that financial institutions issuing the 1099-R for 2025 had the “option” (not mandatory) to show a “Y” (QCD) rather than a “7” (normal distribution) in box 7. I honestly don’t think it would be preferable for taxpayers who do a QCD to populate those line 4 items on the 1040. I think it would eliminate any question as to the role of the QCD on the tax return for any 1099-R that did not show a “Y” on the 1099-R, as opposed to simply offsetting the IRA gross distribution with the QCD amount as a calculation and then showing the net taxable distribution on line 4b of the return.
Since you’re saying that the IRS has made it mandatory for 1099-R issuers to show a “Y” for a QCD in box 7 of the 1099-R starting with tax year 2026, the IRS may decide (for 2026 1040 purposes) not to include the QCD checkbox on the 1040. I think they included the QCD checkbox on the 2025 1040 only because code “Y” was not mandatory for the tax year 2025 1099-R form.
Jeff Enders says
Bob – it’ll be mid-summer before the draft version of the 2026 1040 is available.
Richard says
I suspect the 2026 return will still need a QCD checkbox since it will not be possible for all 1099-R providers to know that a distribution is a QCD and so would not put a Y down. Schwab, for example, allows one to write checks drawn on an accompanyiong IRA bank account. It will not know which of those checks are for QCDs and which are not. Unless it asks the IRA holder to specify somehow that a paarticular check is for a QCD it would not be able to issue a 1099-R with a Y code. That means there would have to be some other way for the taxpayer to indicate that there is a QCD.
Nancy Memmel says
Sorry, no comment here I just clicked on the link in my e-mail to get to the comments but through poor mouse control hit the unsubscribe link instead… sigh.
John F says
Bob
I stand by my comment regarding box 4c(3). Please provide where in the 2025 1040 Instructions it shows: “enter the QCD $ amount in 4(c)(3)”.
Bob says
John. See “Exception 3” on page 27 of the 1040 instructions. It covers how to report the portion of an IRA distribution associated with a QCD.
John F says
Bob
Exception 3 requires the QCD box be checked. That’s it. Box 3 has nothing to do with a QCD. Subtracting 4b (IRA taxable amount) from 4a (IRA distribution) = Amount of QCD. There isn’t any reason to have the QCD shown anywhere else.
Richard says
Bob
> Subtracting 4b (IRA taxable amount) from 4a (IRA distribution) = Amount of QCD.
Unless there is also a rollover.
Bob says
Do whatever you want on the 1040 return. As I previously indicated, my recommendation is to check the QCD box on line 4(c)(2) and enter the QCD amount on line 4(c)(3), whether or not the financial institution indicates a “Y” in the box 7 (Distribution Code) on a 2026 1099-R form. I just can’t see showing the net IRA distribution (i.e., gross distribution minus the QCD amount) on line 4b without also checking the box on line 4(c)(2) and enter the QCD amount on line 4(c)(3).
John F says
And your recommendation is incorrect. Box 3 has nothing to do with QCD. It has to do with a HSA funding distribution (HFD). Read Exception 4 on page 27 and Line 4c on page 28 and I quote “If Exception 4 applies to you, check box 3 on line 4c and enter ‘HFD’ in the entry space next to box 3”.
marvin says
if you have $2,000,000. in an rollover ira,does it make sense to leave 50 percent to wife and 50 percent to 2 children,to lessen children’s tax , they are in high tax states with income over $300,000. I value your opinion. thanking you in advance.
MTG says
I’ve been doing Roth Conversions to avoid taxes in the future while Federal Income taxes are on sale now. If I pass before my wife, she becomes an individual, rather than joint tax filer. Our kids are already in a higher bracket than we are. Big picture says convert fast keeping IRMAA in mind.
The Wizard says
Yes indeed, to Marvin.
This wise plan spreads the kids timeline for depleting their inherited IRAs out to longer than ten years, up to twenty possibly.
And the surviving spouse pays less income tax.
This assumes the surviving spouse has plenty to live on without half of your IRA…
Mike W says
Smart move. It might be better to leave less to wife and more to younger children so more can be depleted over their longer lifetime, assuming wife can live on less than 50%, and of course assuming no family issues.
We don’t have any kids so it’s pretty simple for us. Our intent is for the survivor to ‘assume’ the deceased’s TIRA and Roth’s in their name, which will combine both into one TIRA and one Roth, and of course continue to take the normal RMD albeit a much bigger one now that the survivor will be older, single and with a substantial amount to be taxed.
marvin says
thank you , your replies are always appreciated and thoughtful,marvin
Liftlock says
Marvin,
I agree with the others that it might be smart move. However, I would be cautious about reducing your wife’s assets without considering how long your wife might live and how much money she might need if she lives well beyond a normal life expectancy requiring extended assisted living care. My sister is likely to reach her 104th birthday this week and she needs 24 /7 in home care. The costs of in home care is a tidy sum and the family has become concered about her out living the financial assets available to care for her.
If your kids are high income earners they should be fine without an early inheritance of half of your IRA. One of the unintended economic consequences of the 10 year distribution rule for inherited IRAs is that it may cause productive citizens to retire earlier than might otherwise be the case and become unproductive contributors to society.
MTG says
If someone decides to retire because they have sufficient $ for whatever reason, there is a great opportunity to be a “productive citizen” through volunteerism. Retirement usually also opens a paid position for someone else.
tjk144 says
Another factor to consider in addition to the difference in tax brackets of the suriviving spouse vs children is the estate tax in your state. The estate tax in Illinois where we live is very punitive. If the value of your estate exceeds $4 million, the first $6 miiion (not just the amount over $4 million) is taxed at 5%. Between $6 million and $16 million is taxed at 10%. Thus there is great incentive to get the estate of the surviving spouse under $4 million to avoid the 5% tax on everything up to $6 million. Having the childen inherit 50% of your IRA is one way to accomplish this.
tjk144 says
Bob — While New York’s estate tax is bad, I would gladly take it over Ilinois’ where the cliff starts at $4,000,000.01. Plus any amount gifted over the annual exemption that requires a gift tax return filing reduces this amount dollar for dollar. Also Illinois has the highest real estate taxesin the nation. Just a horrible state to live in. Pritzker and his democratic cohorts have driven it into the ground. Unfortunately I was born here and If I didn’t have so many family ties here, I would move to another more tax friendly state that was more in line with my conservative political views.
Bob says
John. The procedures presented on pg 27 of the 1040 instructions are similar between Exception 3 (QCD distribution) and Exception 4 (HSA/HFD distribution).
Exception 3 is for a QCD distribution and it says: “If all or part of the distribution is a qualified charitable distribution (QCD), enter the total distribution on line 4a. If the total amount distributed is a QCD, enter -0- on line 4b. If only part of the distribution is a QCD, enter the part that is not a QCD on line 4b unless Exception 2 applies to that part. Check box 2 on line 4c.”
The line 4c instructions on pg 28 says: “If Exception 1 applies to you, check box 1 on line 4c. If Exception 3 applies to you, check box 2 on line 4c. If Exception 4 applies to you, check box 3 on line 4c and enter “HFD” in the entry space next to box 3.”
Therefore, it appears that box 3 on line 4c is to indicate “HFD”, rather than my prior comment to enter the QCD $ amount in box 3 on line 4c. In conclusion, if a taxpayer has both a QCD and an HFD, he/she would check box 2 (QCD) on line 4c and also indicate “HFD” in box 3 on line 4c.
The instructions on pg 28 goes on to say “If more than one exception applies, check a box for each exception and include a statement showing the amount of each exception, for example, “Line 4b – $1,000 Rollover and $500 HFD.”
Bob says
tjk144. Estate taxes in New York are also punitive. For deaths in 2026, the New York estate tax exemption is $7.35 million per individual . Estates exceeding this threshold are taxed at progressive rates from 3.06% to 16%. New York has a “cliff” provision: if the estate exceeds the exemption by more than 5%, the exemption is lost entirely, subjecting the whole estate to tax.
Key Aspects of NY Estate Tax:
The “Cliff”: If an estate is valued at 105% or less of the exemption, taxes only apply to the excess. If it exceeds 105% (e.g., above \(\approx\$7.7M\) in 2026), the entire estate is taxed from the first dollar.
Tax Rates: Graduated from 3.06% to a maximum of 16%.
Gifts: While NY has no gift tax, gifts made within three years of death are included in the taxable estate.
Non-Residents: Non-residents owning real or tangible personal property located in New York may owe estate taxes.
Portability: NY does not have federal-style portability, meaning a deceased spouse’s unused exemption is lost if not properly planned for (e.g., via a credit shelter trust).
marvin says
can’t spread kids withdrawals beyond 10 years
The Wizard says
Sort of.
Parent #1 passes and wills each kid $200k IRA, remainder to surviving spouse. Kids have 10 years to empty the inherited IRA.
12 years after #1 death, parent #2 passes and wills each kid a percentage of the remaining IRA. Kids start a new 10-year clock to empty that inherited IRA…
Jeff Enders says
Wizard – what is the logic of the approach?
who is expected to have the higher tax bracket? surviving spouse or children?
The Wizard says
To Jeff,
The logic is based on allowing the “children” to deplete their combined tIRA inheritance over a period longer than the standard ten years, up to twenty years in some cases…
Jeff Enders says
Wizard, but if the children are in a higher tax bracket than the surviving spouse, what is the benefit?
yes, they can deplete it over more than 10 years, but if the children pay higher taxes, then why do it especially if there is absolutely any risk of the surviving spouse running out of money?
If the children are in a higher tax bracket, wouldn’t it be better for the surviving spouse to inherit the whole TIRA, which increases the chances that when the surviving spouses passes, the children are closer to their own retirement, and presumably their own lower tax rate?
I’ve just never seen any one else pose the benefit of creating two 10 year RMD streams. o I don’t understand the logic.
The Wizard says
If the married couple is basically broke or are barely breaking even in retirement, then it makes zero sense to plan on any early disbursement to heirs, correct.
But if they have $10 Million or more in financial assets, the situation is different.
Specific details matter…
JoeTaxpayer says
And, if the couple is in-between, not broke, but not enough to want to let half go when one passes, it’s not all-or-none.
Couple can make use of Roth conversions to top off the lower brackets each year, mitigating the damage their kids will face.
Or – easy to split the beneficiary so the kid(s) get a portion on death of first spouse, but living spouse gets the rest.
Agree, 100% with Wizard, the details matter, both for the couple, and the kids.