Updated September 2026 · Reviewed by the CoverageCo team
IRMAA is an income-related surcharge added to your Part B and Part D premiums when your income exceeds a threshold set each year by CMS. It's calculated from a tax return roughly two years old, so it often reflects income you earned before retiring — and you can ask Social Security to recalculate after a life-changing event.
Key takeaways
- IRMAA uses a tax return from about two years earlier, not your current income.
- It adds a surcharge to both Part B and Part D premiums, in tiered brackets.
- Brackets are cliffs — one dollar over a threshold moves you into the whole next tier.
- Retirement, widowhood, and divorce are appealable life-changing events. File Form SSA-44.
How the surcharge works
Most people pay the standard Part B premium. If your modified adjusted gross income exceeds the first threshold, you pay that standard amount plus an additional charge, and a separate surcharge is added to your Part D premium.
Brackets and amounts are set annually by CMS, so any figure printed on an agency website is out of date each January. Check current numbers at Medicare.gov or with Social Security.
What doesn't change is the structure: these are cliffs, not slopes. Being one dollar over a threshold puts you in the entire next tier, which is why people near a line watch it closely.
The two-year lookback, and why it blindsides retirees
This is the part that feels unfair, and understanding it is worth real money.
Social Security determines IRMAA from your tax return roughly two years prior. Someone retiring at 65 is therefore assessed on income from their working years — the highest-earning period of their life, and one with no relationship to what they now live on.
So the surcharge is calculated from money you no longer earn. That's not a mistake in the system; it's how the timing works. It is, however, appealable.
Life-changing events you can appeal on
Social Security will reconsider using current income if one of a defined set of events applies:
- Work stoppage or reduction, which includes retiring
- Marriage, divorce or annulment, or the death of a spouse
- Loss of income-producing property through no fault of your own
- Loss or reduction of a pension
- An employer settlement payment following bankruptcy or closure
How to file the appeal
The form is SSA-44, "Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event." You state which event applied, when it happened, and your estimated current income, then attach evidence — a retirement letter, a death certificate, a divorce decree.
File as soon as the event occurs. You don't need to wait for a determination letter, and waiting only means paying a surcharge you may not owe for longer.
People routinely pay this for a year or more without knowing an appeal exists. If you retired recently and your premium jumped, check this first.
Planning around the brackets
Because brackets are cliffs, income timing matters more here than in most planning.
One-time events — a Roth conversion, selling property, a large retirement distribution — can push you over a threshold two years later. Spreading such events across tax years, where possible, can keep you under a line.
That's genuinely a conversation for a tax professional or financial advisor, not an insurance agent, and anyone telling you otherwise is overstepping. What an agent can do is make sure you know the surcharge exists and that appeals are available.
Common questions
How is IRMAA calculated?
From your modified adjusted gross income on a tax return roughly two years earlier, compared against brackets CMS sets annually. Above the first threshold, surcharges are added to both Part B and Part D premiums.
Can I appeal IRMAA?
Yes, if a qualifying life-changing event reduced your income — retirement, marriage, divorce, death of a spouse, loss of a pension, or loss of income-producing property. File Form SSA-44 with supporting evidence.
What year's income does IRMAA use?
Generally the tax return from about two years before the coverage year, which is why recent retirees are often assessed on working-year income.
Does IRMAA apply if I have a Medicare Advantage plan?
Yes. You continue paying your Part B premium including any surcharge while enrolled in an Advantage plan, and a Part D surcharge can apply to drug coverage too.