A complete guide to understanding which income sources affect your Medicare premiums and how to plan ahead to minimize or avoid IRMAA surcharges. Standard Part B premium: $202.90/month for 2026.
Important: 2-Year Look-Back Period
Your 2026 IRMAA is based on your 2024 tax return. If your income has significantly decreased since then due to a qualifying life event, you may request a new determination from Social Security.
Quick Answer
IRMAA uses Modified Adjusted Gross Income (MAGI), which includes your adjusted gross income plus tax-exempt interest income. This means almost all income sources count, including:
- Wages, salaries, and self-employment income
- Social Security benefits (taxable portion)
- Pension and annuity distributions
- Traditional IRA withdrawals
- Capital gains from investments
- Rental income
- Tax-exempt municipal bond interest (yes, it counts!)
Notable exception: Qualified Roth IRA distributions do NOT count toward IRMAA, making Roth planning valuable for Medicare cost management.
2026 IRMAA Brackets and Surcharges
Source: Medicare.gov IRMAA Information (Amounts for 2026 coverage year based on 2024 income)
Strategies to Reduce IRMAA
Before Age 63
After Age 65
Frequently Asked Questions
Related Medicare Resources
Complete Connecticut Medicare overview
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Information sourced from Medicare.gov and the Social Security Administration.
Healthwise Insurance, LLC | CT License #2415204 | Important Disclosures
What income counts toward IRMAA?
IRMAA is calculated using Modified Adjusted Gross Income (MAGI), which includes your adjusted gross income plus tax-exempt interest income. This includes wages, Social Security benefits, pensions, IRA withdrawals, capital gains, rental income, and interest from municipal bonds.
What tax year does Medicare use for IRMAA?
Medicare uses your tax return from 2 years ago. For 2026 premiums, Social Security uses your 2024 tax return. This is called the ‘look-back period’ and allows time for tax returns to be processed.
Can I appeal my IRMAA determination?
Yes, you can request a new initial determination if you’ve experienced a ‘life-changing event’ such as marriage, divorce, death of spouse, work stoppage, work reduction, loss of income-producing property, or employer pension plan settlement.
Does Roth IRA income count toward IRMAA?
No, qualified Roth IRA distributions do not count toward MAGI for IRMAA purposes. However, Roth conversions do count as taxable income in the year of conversion and can trigger higher IRMAA brackets.
How do I avoid IRMAA surcharges?
Strategies include Roth conversions before age 63 (to avoid the look-back period), charitable giving through Qualified Charitable Distributions, timing of capital gains realizations, and proper Social Security claiming strategies.