Does Social Security count for Irmaa?
Yes, Social Security benefits count toward IRMAA (Income-Related Monthly Adjustment Amount), but only the taxable portion.
Medicare calculates IRMAA surcharges based on your Modified Adjusted Gross Income (MAGI). Your MAGI is calculated by taking your Adjusted Gross Income (AGI) and adding back any tax-exempt interest (such as municipal bond income). Because your AGI only includes the taxable portion of your Social Security benefits (which can be up to 85% depending on your overall income), the non-taxable portion does not affect IRMAA.
How to Calculate the Social Security Impact on IRMAA
- Taxable Portion (Included): Up to 85% of your Social Security benefits are considered taxable income based on your "combined income". This portion sits directly on your tax return as part of your AGI and counts toward IRMAA.
- Non-Taxable Portion (Excluded): The remaining percentage (at least 15%) of your benefits is completely free from federal tax and does not count toward IRMAA.
The Two-Year Lookback
The Social Security Administration (SSA) determines your IRMAA tier using your federal tax data from two years prior. For example, the 2026 IRMAA surcharges are dictated by the financial data on your 2024 tax returns. If you cross an income threshold by even one dollar, you will face the full surcharge for that bracket.
What income is not counted for Irmaa?
For Medicare's Income-Related Monthly Adjustment Amount (IRMAA), income sources that are not part of your federal Adjusted Gross Income (AGI) or tax-exempt interest are excluded.
✅ Excluded Income Sources
- Roth IRA/401(k) withdrawals: Qualified distributions are entirely tax-free.
- HSA distributions: Withdrawals for qualified medical expenses do not count.
- Gifts and inheritances: Inherited property or cash gifts are not taxable income.
- Life insurance proceeds: Death benefits paid out to beneficiaries are excluded.
- Loan proceeds: Borrowed money or return of principal from sold assets (with no capital gain) is omitted.
- Non-taxable Social Security: Only the taxable portion (up to 85%) is counted; the rest is ignored.
Does your full Social Security count towards Irmaa?
No, your full Social Security benefit does not count toward the Income-Related Monthly Adjustment Amount (IRMAA). Only the taxable portion of your Social Security benefits is included in the calculations.
How Social Security Impacts IRMAA
Your IRMAA eligibility is determined by your Modified Adjusted Gross Income (MAGI) from your federal tax return from two years prior.
- The Taxable Limit: Depending on your total provisional income, a maximum of 85% of your Social Security benefits can ever be considered taxable. The remaining 15% (or more, if your income is lower) is completely tax-free and is never counted toward IRMAA.
- The Flow to MAGI: The calculation for IRMAA uses a very specific definition of MAGI. It is calculated as your Adjusted Gross Income (AGI) plus any tax-exempt interest (such as municipal bond interest). Because only the taxable portion of your Social Security flows into your initial AGI, that is the only part that impacts IRMAA.
Summary of What Counts for IRMAA
To keep your total income visible for Medicare planning, consider how your retirement income sources are categorized:
| Counts Toward IRMAA | Excluded From IRMAA |
|---|---|
| • Taxable Social Security (up to 85%) • Traditional IRA / 401(k) withdrawals • Pension income • Capital gains and dividends • Roth conversions • Tax-exempt municipal bond interest | • Non-taxable Social Security (at least 15%) • Qualified Roth IRA / 401(k) distributions • Health Savings Account (HSA) distributions • Life insurance death benefits • Inheritances and personal gifts • Veterans' disability benefits |
If you experience a major drop in income due to a life-changing event (such as retirement or the loss of a spouse), you can file Form SSA-44 with the Social Security Administration to request a reduction in your IRMAA surcharge.
How to avoid Irmaa surcharges?
You can avoid or reduce Medicare IRMAA (Income-Related Monthly Adjustment Amount) surcharges by actively lowering your Modified Adjusted Gross Income (MAGI) below specific threshold tiers, keeping in mind that Medicare looks at your tax return from two years prior.
Lower Your Taxable Income and Manage Withdrawals
- Use Qualified Charitable Distributions (QCDs): If you are age 70½ or older, you can donate directly from your traditional IRA to a qualified charity. This satisfies or reduces your Required Minimum Distributions (RMDs) without counting toward your MAGI.
- Draw from Tax-Free Accounts: Withdraw money from Roth IRAs or health savings accounts (HSAs) because these distributions do not count toward your MAGI.
- Spread Out Large Income Events: Avoid large one-time spikes in income—such as selling a business, large capital gains, or executing massive Roth conversions—by spreading them across multiple tax years.
- Utilize Tax-Loss Harvesting: Offset taxable capital gains by selling underperforming investments at a loss.
File an Appeal for Life-Changing Events
- Submit Form SSA-44: If your income has dropped due to a qualifying life-changing event—such as retirement, work stoppage, reduced work hours, divorce, or the death of a spouse—you can ask the Social Security Administration to use your current lower income instead of the two-year lookback. Most users on Reddit and financial experts agree that filing Form SSA-44 is the most direct path to relief if you hit an unexpected income cliff.
Does inheritance affect Irmaa?
An inheritance can affect your Medicare Income-Related Monthly Adjustment Amount (IRMAA) if it generates taxable income that pushes your Modified Adjusted Gross Income (MAGI) above the annual IRMAA threshold.
How Different Types of Inheritance Affect IRMAA
- Cash and Life Insurance: Simply receiving a cash inheritance or a life insurance payout is tax-free at the federal level and does not count as income, meaning it will not trigger IRMAA.
- Inherited Retirement Accounts (Traditional IRAs/401ks): Withdrawals from inherited pre-tax retirement accounts do count as taxable income. Under current rules, most non-spouse beneficiaries must empty these accounts within 10 years, which can spike your MAGI and trigger higher Part B and Part D premiums for those years.
- Investments and Real Estate: Inheriting stocks, mutual funds, or real estate does not raise your taxes or IRMAA right away. However, if you sell these assets and realize large capital gains, those profits are counted in your MAGI and can trigger an IRMAA surcharge.
Key Rules and Timing
- The Two-Year Lookback: Medicare uses your tax return from two years prior to determine your IRMAA. For example, a large taxable withdrawal or capital gain in 2026 will affect your Medicare premiums in 2028.
- Duration of Surcharge: If the taxable event happens in only one year, the higher IRMAA premium typically lasts for just one year. If you spread out withdrawals from an inherited IRA over several years, the higher premiums can persist for multiple years.
- Future Income from Assets: Even if the initial cash or property was tax-free, any interest, dividends, or rental income generated by those assets going forward will count toward your MAGI.
Does Non-Taxable Social Security Count Toward IRMAA
At what age does Irmaa go away?
IRMAA does not go away at a specific age; it continues for life whenever your modified adjusted gross income (MAGI) is above the government limit.
How IRMAA Works
- Calculated yearly: The Social Security Administration checks your income every year.
- Two-year look-back: Your surcharge depends on the tax return you filed from two years prior.
- Income-based: If your income drops below the threshold in any year (due to lower earnings or fewer investment sales), your IRMAA will go away two years later.
- Can return: If your income goes back up later—such as when Required Minimum Distributions (RMDs) begin—IRMAA will return.
What income affects IRMAA in 2026?
For 2026, Medicare IRMAA (Income-Related Monthly Adjustment Amount) surcharges affect single filers with a 2024 Modified Adjusted Gross Income (MAGI) above $109,000 and married couples filing jointly with a MAGI above $218,000.
How IRMAA Income is Calculated
- Two-Year Lookback: Your 2026 IRMAA is based on your tax return from two years prior (your 2024 MAGI).
- MAGI Definition: This includes your Adjusted Gross Income (AGI) plus any tax-exempt interest income.
- Income Sources Included: Wages, capital gains, traditional IRA/TSP distributions, Roth conversions, and pensions all count toward your total.
2026 IRMAA Income Brackets
If your 2024 income crosses these thresholds, you pay an extra monthly fee on top of standard Part B and Part D premiums:
- Tier 1: Single $109,001–$137,000 | Joint $218,001–$274,000
- Tier 2: Single $137,001–$171,000 | Joint $274,001–$342,000
- Tier 3: Single $171,001–$205,000 | Joint $342,001–$410,000
- Tier 4: Single $205,001–$500,000 | Joint $410,001–$750,000
- Tier 5: Single Above $500,000 | Joint Above $750,000
You can read more details about these thresholds in this 2026 IRMAA Guide.
What are the Irmaa brackets for Social Security?
For 2026, the Medicare Income-Related Monthly Adjustment Amount (IRMAA) surcharges begin at a Modified Adjusted Gross Income (MAGI) of $109,000 for single filers and $218,000 for married couples filing jointly.
How IRMAA Works
- Two-Year Lookback: Your 2026 IRMAA is based on the federal tax return from 2024 (two years prior).
- Included Income: This uses your AGI plus tax-exempt interest income.
- What it Affects: It adds an extra monthly fee to your Medicare Part B (medical insurance) and Medicare Part D (prescription drug) coverage.
2026 IRMAA Brackets and Surcharges
| Single MAGI | Married Filing Jointly MAGI | Part B Monthly Surcharge | Part D Monthly Surcharge |
|---|---|---|---|
| ≤ $109,000 | ≤ $218,000 | $0 ($202.90 base) | $0.00 |
| $109,001 - $137,000 | $218,001 - $274,000 | $81.20 | $14.50 |
| $137,001 - $171,000 | $274,001 - $342,000 | $202.90 | $37.50 |
| $171,001 - $205,000 | $342,001 - $410,000 | $324.60 | $60.40 |
| $205,001 - $499,999 | $410,001 - $749,999 | $446.30 | $83.30 |
| ≥ $500,000 | ≥ $750,000 | $487.00 | $91.00 |
Note: For Married Filing Separately, thresholds differ sharply; incomes above $109,000 hit top-tier surcharges quickly. You can review official policy details at the Social Security Administration POMS.
What income is not counted against Social Security?
For the Social Security retirement earnings test, only earned income (wages from an employer or net earnings from self-employment) counts against your benefits if you claim them before reaching your full retirement age.
The Social Security Administration (SSA) completely excludes unearned and passive income, meaning the following types of income will not reduce your monthly checks:
1. Investment and Portfolio Income
- Dividends and interest from stocks, bonds, mutual funds, or savings accounts.
- Capital gains from the sale of stock, real estate, or other investments.
2. Retirement and Pension Benefits
- Pensions from private employers, unions, or the government.
- Retirement account distributions, including traditional or Roth IRAs, 401(k)s, and 403(b) plans.
- Annuity payments.
- Military retirement benefits.
3. Other Government or Assistance Benefits
- Veterans benefits.
- Unemployment compensation.
- Workers' compensation or disability benefits.
- Need-based assistance (like SNAP, Section 8, or energy assistance).
4. Miscellaneous Income
- Passive rental income from properties you own, provided you do not materially participate as a real estate professional or provide personal services to the tenants.
- Inheritances and gifts.
- Lawsuit settlements.
- Jury duty pay.
- Your spouse's income, as the earnings test evaluates only your individual wages.
5. "Special Payments" for Past Work
If you receive money after you retire for work you did before you started getting Social Security, it is considered a special payment and does not count toward the earnings limit. This includes:
- Accumulated vacation or sick pay.
- Back pay or deferred compensation.
- Severance pay.
- Stock options exercised after retirement.
Important Context on the Earnings Limits
- If you are at or above Full Retirement Age (FRA): There is no earnings limit. You can make an unlimited amount of money from wages, investments, or any other source without any reduction to your benefit checks.
- If you are under Full Retirement Age: In 2026, the annual limit for earned wages is $24,480. If your wages or net self-employment earnings go over this limit, the SSA will withhold $1 for every $2 you earn above it.
- Taxes vs. Reductions: While the income sources listed above will not trigger a reduction in your monthly benefit via the earnings test, they do count toward your adjusted gross income. This means passive income or IRA withdrawals could still make a portion of your Social Security benefits subject to federal income taxes.
You can review specific guidelines on the official Social Security Administration (SSA) Guide to Working While Receiving Benefits.
Can I deduct Irmaa on my tax return?
Yes, you can deduct Medicare IRMAA (Income-Related Monthly Adjustment Amount) surcharges on your federal tax return as part of your medical and dental expenses.
How the Deduction Works
- Itemizing required: You must itemize your deductions on Schedule A (Form 1040) rather than taking the standard deduction to claim IRMAA.
- 7.5% AGI threshold: Your total qualified medical expenses—including all Medicare premiums and IRMAA surcharges—must exceed 7.5% of your Adjusted Gross Income (AGI). You can only deduct the amount that goes over this 7.5% limit.
- Self-employed exception: If you are self-employed, you may qualify for the self-employed health insurance deduction, which allows an above-the-line deduction for health insurance premiums without needing to itemize.