The Medicare Income Related Monthly Adjustment Amount (IRMAA) is a means-testing program that applies an additional Medicare surcharge to Medicare Part B and Part D premiums for higher income individuals and couples.
The surcharge is based on the income reported on the tax return from two years prior (example, the 2026 IRMAA is based on the income reported on the 2024 income tax return) and is reset annually based on updated income reported. Therefore, the IRMAA is not permanent and will adjust annually based on changes in income each year.
There are five different tiers for IRMAA, with each threshold increasing the surcharge, which is added to the base premium. It is important to consider the IRMAA thresholds when tax planning especially with the new tax law changes. Generating more income in certain years, for example to take advantage of additional deductions, can be good for longer term income tax planning, but all other factors must be considered, including the impact the additional income may have on the IRMAA. In this case both income taxes and IRMAA surcharges must be considered together.