Quick answer
What is IRMAA?
IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge added to Medicare Part B and Part D premiums when your modified adjusted gross income passes $109,000 (single) or $218,000 (married filing jointly). For 2026 it is based on your 2024 tax return, and it raises Part B from $202.90 to as much as $689.90 a month per person.
Key takeaways
- 01IRMAA starts above $109,000 single / $218,000 joint MAGI in 2026.
- 02It uses your tax return from two years earlier (2024 for 2026).
- 03Part B rises from $202.90 to up to $689.90 a month per person.
- 04Thresholds are cliffs: $1 over costs the whole tier for the year.
| Stands for | Income-Related Monthly Adjustment Amount |
|---|---|
| 2026 standard Part B | $202.90 a month |
| Starts above | $109,000 single / $218,000 joint |
| Lookback | Tax return from 2 years earlier |
| Top Part B premium | $689.90 a month |
| Appeal form | SSA-44 (life-changing event) |
The Short Answer
What is IRMAA?
IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge added to Medicare Part B and Part D premiums when your modified adjusted gross income passes $109,000 (single) or $218,000 (married filing jointly). For 2026 it is based on your 2024 tax return, and it raises Part B from $202.90 to as much as $689.90 a month per person.
Social Security sets IRMAA once a year from IRS data. There are five surcharge tiers, and the rules are cliffs: one dollar over a threshold triggers the whole tier. Capital gains, Roth conversions, required minimum distributions and even tax-exempt municipal bond interest all count toward the income test.
How It Works
How does IRMAA work?
Medicare normally covers about 75% of the cost of Part B, and you pay a standard premium for the rest. IRMAA reduces that subsidy as income rises: the five tiers make you pay 35%, 50%, 65%, 80% and 85% of the program cost instead of 25%. In 2026 that turns the $202.90 standard premium into $284.10, $405.80, $527.50, $649.20 or $689.90 a month.
Part D works the same way, except the surcharge is a flat add-on paid to Medicare on top of your plan's own premium: $14.50 to $91.00 a month per person in 2026. Each spouse is assessed separately, so a married couple pays twice.
| MAGI (single / joint), 2024 return | Part B monthly | Part D add-on monthly |
|---|---|---|
| $109,000 or less / $218,000 or less | $202.90 | $0.00 |
| $109,000–$137,000 / $218,000–$274,000 | $284.10 | $14.50 |
| $137,000–$171,000 / $274,000–$342,000 | $405.80 | $37.50 |
| $171,000–$205,000 / $342,000–$410,000 | $527.50 | $60.40 |
| $205,000–$500,000 / $410,000–$750,000 | $649.20 | $83.30 |
| Above $500,000 / Above $750,000 | $689.90 | $91.00 |
The Income Test
What income counts toward IRMAA?
IRMAA uses modified adjusted gross income, defined in 20 CFR §418.1010 as your adjusted gross income plus tax-exempt interest and a few kinds of excluded foreign and territorial income. That definition catches several items people assume are safe:
Capital gains from selling stock
A $1M gain on concentrated stock is $1M of AGI in the year of sale, even if it is taxed at long-term rates.
Municipal bond interest
Tax-free for income tax, but added back for IRMAA. See Treasury vs municipal bonds.
Roth conversions and RMDs
Both are ordinary income in the year they happen.
RSU vesting and option exercises
Wages in the year they vest or are exercised, so the last working years often land in high tiers.
The Lookback
Which year's income does IRMAA use?
Social Security uses the most recent return the IRS has, which is normally the one from two years before the premium year. Your 2026 premium uses 2024 income; your 2027 premium will use 2025 income. If only a three-year-old return is available, SSA uses it provisionally and corrects it later under 20 CFR §418.1140.
Income year that sets your first premiums
A large stock sale, bonus or Roth conversion this year shows up when you enroll at 65.
Second lookback year
Sets the premium for the year you turn 66.
Enroll in Medicare
SSA mails an IRMAA notice if the 2-year-old MAGI is above the threshold.
Appeal if income fell
Retirement and other life-changing events can be used to request a recalculation with Form SSA-44.
Where Embark fits
A concentrated stock sale at 63 can set your Medicare premiums at 65. Is there a way to get income without the gain?
Run your ticker to see what the position could target in annual income without a taxable sale.
- A §721 in-kind contribution is not a sale: $0 tax at contribution, so no capital gain lands in MAGI that year
- Avoids the one-year gain spike that a large stock sale creates two years before your Medicare bill
- Targets 10%+ annual income from shares you already own; that income is taxable and counts in MAGI
Run the numbers
Live prices · takes under a minute · no obligation
What It Costs
How much does IRMAA cost a couple?
Because the surcharge is per person and covers both Part B and Part D, the real cost for a married couple is double the monthly figures. The chart shows the extra yearly cost in each 2026 tier compared with paying the standard premium.
Chart
Extra yearly Medicare cost for a married couple, 2026 (Part B + Part D IRMAA)
At the top tier a couple pays about $13,872 a year more than the standard premium. Since tiers are cliffs, a household at $218,001 of MAGI pays $2,297 more than one at $218,000.
Embark
Where does Embark fit in IRMAA planning?
The biggest IRMAA surprises usually come from a single year: selling a concentrated stock position, a final RSU vest, or a business sale. Contributing appreciated shares to Embark's SPV under §721 is not a sale, so there is $0 tax at contribution and no capital gain lands in that year's MAGI.
Embark then targets 10%+ annual income from the contributed position. That income is taxable and does count in MAGI, so it should be planned like any other income stream; it is spread over years rather than arriving as one lump. Shares have a 3-year lock-up, and Embark is for accredited investors. For the wider picture see how to avoid IRMAA.
FAQ
Frequently asked questions
What does IRMAA stand for?
Income-Related Monthly Adjustment Amount. It is the extra premium higher-income Medicare enrollees pay for Part B and Part D.
What are the IRMAA thresholds for 2026?
IRMAA starts above $109,000 of MAGI for single filers and $218,000 for joint filers, with further tiers at $137,000, $171,000, $205,000 and $500,000 (single) and $274,000, $342,000, $410,000 and $750,000 (joint).
What year's income is used for 2026 IRMAA?
Your 2024 federal tax return. Social Security normally uses the return from two years before the premium year.
Does IRMAA apply to both spouses?
Yes. Each spouse enrolled in Medicare pays the surcharge, and a joint return puts both in the same tier.
Does municipal bond interest count for IRMAA?
Yes. IRMAA's MAGI adds tax-exempt interest back to adjusted gross income under 20 CFR §418.1010.
Can you appeal IRMAA?
Yes. If your income dropped because of a life-changing event such as retirement, you can file Form SSA-44 to ask Social Security to use a more recent year.
Sources
Primary sources
Sources
- Federal Register 2025-20251: Medicare Part B premium and IRMAA amounts for 2026 (GovInfo)
- CMS fact sheet: 2026 Medicare Parts A and B premiums and deductibles, Part D IRMAA
- Illinois Department on Aging (SHIP): 2026 Part D IRMAA table
- 20 CFR §418.1010: IRMAA definitions, including modified adjusted gross income
- 20 CFR §418.1140: Using a more recent tax year's MAGI
- SSA-44: Medicare Income-Related Monthly Adjustment Amount, Life-Changing Event
- 26 U.S. Code §721: Nonrecognition of gain or loss on contribution to a partnership
Cite this article
Embark Funds Research. “What Is IRMAA? Medicare's Income Surcharge.” Embark Funds, updated October 29, 2026. https://www.embarkfunds.com/insights/what-is-irmaa-medicare-surcharge
Not tax, legal or investment advice: This article is educational and is not tax, legal, investment or Medicare advice. Rules and dollar amounts change every year and depend on your facts. Work with a CPA or financial planner before acting. Embark income figures are targets, not guarantees. Contributed shares have a 3-year lock-up, and Embark is open to accredited investors only.
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Medicare Planning
Keep a Lump-Sum Gain Out of Your IRMAA Year
Contribute appreciated stock to Embark's SPV with $0 tax at contribution and target 10%+ annual income. 3-year lock-up; accredited investors.