Yes — Medicare checks your income every year to determine if you owe an IRMAA surcharge. Learn how it works, the 2026 thresholds, and how to control it in retirement.
Executive Summary: Yes, Medicare checks your income every year. If your income exceeds certain thresholds, you'll pay a surcharge called IRMAA on top of your standard Medicare premiums. The good news: retirees have more control over their income — and their Medicare costs — than they may realize.
Medicare checks your income every year without exception. The Social Security Administration (SSA) pulls your tax return from two years prior and uses that figure to determine whether you owe an Income-Related Monthly Adjustment Amount, known as IRMAA. For 2026, Medicare is looking at your 2024 tax return. For 2027, it will look at your 2025 return — and so on, every single year.
This two-year lookback is one of the most misunderstood pieces of Medicare planning. A high-income year from your final year of work — or a large IRA withdrawal, Roth conversion, or home sale — can trigger a surcharge two years later, even if your income has dropped significantly since then.
IRMAA stands for Income-Related Monthly Adjustment Amount. It is a surcharge added to your Medicare Part B (medical coverage) and Part D (prescription drug) premiums when your modified adjusted gross income, or MAGI, exceeds a set threshold.
In 2026, IRMAA kicks in when your MAGI exceeds $109,000 as a single filer or $218,000 for married couples filing jointly. The surcharge operates on a sliding scale with five tiers. At the lowest tier, single filers pay an extra $81.20 per month on top of the standard Part B premium of $202.90. At the highest tier — for income above $500,000 for individuals or $750,000 for couples — that surcharge climbs to an additional $487.00 per month for Part B alone. Part D carries its own IRMAA surcharge ranging from $14.50 to $91.00 per month on top of your plan premium.
IRMAA is a cliff-style surcharge. Exceed a threshold by even one dollar, and you jump to the full surcharge for that tier. That makes income management in retirement not just valuable — it makes it precise.
This is where retirement planning can genuinely pay off. Most retirees have access to three types of accounts, each taxed differently, and that gives you real flexibility to manage what Medicare sees as income.
Taxable accounts — such as brokerage accounts — give you control over when you recognize gains. You choose when to sell, which helps you time income around IRMAA thresholds.
Tax-deferred accounts — traditional IRAs and 401(k)s — produce ordinary income when you take withdrawals. These distributions count toward your MAGI and can push you into or across an IRMAA tier if not managed carefully. Required Minimum Distributions (RMDs) from these accounts must begin at age 73+ and are fully taxable, so planning ahead matters.
Roth accounts — Roth IRAs and Roth 401(k)s — are powerful IRMAA planning tools. Qualified Roth distributions do not count toward your MAGI. That means you can draw from a Roth to cover living expenses without increasing your Medicare costs. Strategic Roth conversions in your early retirement years can reduce future RMDs and give you a lower taxable income footprint when Medicare is watching most closely.
The goal is to draw from each bucket strategically so that your reported income lands where you want it, rather than wherever it happens to fall.
Because Medicare uses a two-year lookback, a high-income year can follow you — but so can a significant life change. If you retired, lost a spouse, or experienced another qualifying event that reduced your income, you can file Form SSA-44 to appeal your IRMAA determination. The SSA can use more recent income data instead of the two-year-old return.
If your higher income was simply a one-time event — a large Roth conversion, a property sale, an inheritance — your IRMAA will decrease automatically the following year once that income no longer appears in the lookback window.
Yes. The Social Security Administration reviews your tax return annually and adjusts your Medicare premiums each year based on your income from two years prior.
Medicare uses your Modified Adjusted Gross Income (MAGI), which is your Adjusted Gross Income plus any tax-exempt interest income, such as income from municipal bonds. Withdrawals from traditional IRAs and 401(k)s count. Qualified Roth distributions do not.
In 2026, IRMAA surcharges begin at $109,000 for single filers and $218,000 for married couples filing jointly, based on your 2024 tax return.
Potentially, yes. If your income spike was due to a qualifying life-changing event such as retirement or the death of a spouse, you can appeal using Form SSA-44. If the high income was a one-time event like a large IRA withdrawal, your surcharge will likely decrease automatically the following year.
Qualified Roth distributions are not counted in your MAGI, so they do not affect IRMAA calculations. Drawing income from a Roth instead of a traditional IRA in a given year can keep your reported income below IRMAA thresholds.
Written by Andrew Matz, Financial Planner at Oak Road Wealth Management.
