How Medicare’s two-year IRMAA lookback works, what income counts, and when the appeal form can — and can’t — save you.
IRMAA — the income-related monthly adjustment amount — doesn’t look at what you earn this year. It looks at your tax return from two years ago.
Your 2026 Medicare premium was set by your 2024 return. And whatever lands on your 2026 return — including a Roth conversion you do this year — sets your premium for 2028.
That gap is why the surcharge surprises people. By the time the higher premium shows up, the decision that caused it is two years in the past — long enough that most people never connect the two. The letter from Social Security arrives, the premium jumps, and it reads like a billing error. It isn’t. It’s the tax return from two years earlier, working exactly as designed.
IRMAA is a cliff, not a ramp. Cross a threshold by a single dollar and you pay the full higher premium for that tier — there’s no partial charge for barely crossing.
A hypothetical to make it concrete: a married couple with $180,000 of MAGI on their 2024 return pays the standard premium in 2026. If a Roth conversion had pushed that 2024 MAGI to $220,000 — $2,000 over the first threshold — each spouse would pay about $974 more per year for Part B alone in 2026. Roughly $1,948 for the couple, before Part D surcharges. Same household, same savings — one line crossed.
| 2026 Tier | Married filing jointly (2024 income) | Single (2024 income) | Part B / mo | Extra / yr (per person) |
|---|---|---|---|---|
| Standard | $218,000 or less | $109,000 or less | $202.90 | — |
| Tier 1 | $218,001 – $274,000 | $109,001 – $137,000 | $284.10 | + $974 |
| Tier 2 | $274,001 – $342,000 | $137,001 – $171,000 | $405.90 | + $2,436 |
| Tier 3 | $342,001 – $410,000 | $171,001 – $205,000 | $527.60 | + $3,896 |
| Tier 4 | $410,001 – $750,000 | $205,001 – $500,000 | $649.40 | + $5,358 |
| Tier 5 | Above $750,000 | Above $500,000 | $689.90 | + $5,844 |
For the full picture of how the cliff fits alongside brackets, RMDs, and what your heirs keep, the free guide walks all of it in order.
IRMAA runs on modified adjusted gross income: your adjusted gross income plus tax-exempt interest. Yes — even municipal bond interest, the income you chose specifically because it isn’t taxed, counts here.
Counts toward the threshold:
Doesn’t count:
That last list is the quiet argument for conversions in the first place: dollars moved to a Roth stop showing up in MAGI forever after. The trap is only in the year of the move — the conversion itself spikes the very number Medicare reads.
Social Security does have an appeal path. Form SSA-44 lets you ask them to use a more recent, lower-income year instead of the lookback year — but only if a qualifying life-changing event caused the drop. There are exactly eight:
Notice what’s not on the list:
A surcharge caused by a conversion generally stands for that year. There is no appeal for having done the conversion — which is exactly why the time to see the cliff is before the conversion, not after the letter arrives.
The flip side works in your favor. If your lookback-year return shows working income but you’ve since retired, that’s a work stoppage — a listed event. Many new retirees can file SSA-44 and have their premium set from their lower, current income instead. The form helps the person whose income fell for a listed reason. It does nothing for the person whose income spiked by choice.
The lookback cuts both directions. If Medicare starts at 65, the income year that sets your first premium is typically the year you were 63 — often while you were still working, possibly in your highest-earning years. People who’ve never heard of IRMAA make their first contact with it through income they earned before they ever enrolled.
The second trap is gentler than most people fear: IRMAA resets every year. It’s recalculated annually from the return two years back, so a single high-income year generally means a single year of surcharges — not a permanent penalty. One conversion, one spike, one year of higher premiums, then back down. That’s also why how a conversion is spread across years changes what the whole plan costs: the same total amount, moved in different-sized pieces, can touch the cliff once, several times, or never.
Where those lines sit for your numbers — how much room you have under the next threshold before a conversion trips it — is a calculation, not a guess. It’s one of the numbers the free calculator puts on screen.
No. Form SSA-44 lists eight qualifying events — marriage, divorce or annulment, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, and an employer settlement payment. Higher income from a conversion or a capital gain is not on the list, so a surcharge caused by a conversion generally stands for that year.
One year at a time. It’s recalculated every year from the return two years back. A single high-income year generally means a single year of surcharges; sustained higher income means sustained surcharges.
Modified adjusted gross income: AGI plus tax-exempt interest. Conversions, RMDs, capital gains, and pensions count. Qualified Roth withdrawals do not.
Two years before the premium year. If Medicare starts at 65, the income that sets your first premium is typically from the year you were 63.
Your brackets, your IRMAA headroom, your RMDs — free, in about 3 minutes.
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