Medicare IRMAA Surcharges in 2026: How Dayton Retirees Can Avoid Higher Premiums

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Plenty of people reach Medicare age assuming the Part B premium is a fixed number everyone pays. Then a letter arrives from Social Security saying they owe considerably more, and it isn’t obvious why.

That letter is IRMAA. It stands for Income-Related Monthly Adjustment Amount, and it’s one of the most frustrating surprises in Medicare — not because it’s hidden, exactly, but because almost nobody explains it until it shows up in the mail.

What IRMAA Actually Is

Medicare Part B and Part D are subsidized. Most people pay roughly a quarter of what their coverage actually costs, and taxpayers pick up the rest. IRMAA is the government’s way of saying that if your income is above a certain line, you should pay a larger share.

It isn’t a tax and it isn’t a penalty for doing something wrong. It’s a surcharge stacked on top of your standard premium. For 2026, the standard Part B premium is $202.90 a month. If IRMAA applies to you, that number climbs — in some cases dramatically — and a separate surcharge gets added to whatever your Part D drug plan already charges.

The part that stings is that IRMAA is a cliff, not a ramp. Go one dollar over a bracket line and you pay the full surcharge for that entire bracket. There’s no phase-in and no partial credit.

The 2026 Income Brackets

IRMAA looks at your modified adjusted gross income, or MAGI. For most people that’s your adjusted gross income plus any tax-exempt interest — municipal bond income counts here, which surprises a lot of folks who bought muni bonds specifically to keep taxes down.

For 2026, the surcharge starts once MAGI exceeds $109,000 for a single filer or $218,000 for a married couple filing jointly. Below those lines, you pay the standard $202.90 and nothing more.

Above them, there are five brackets. Total monthly Part B premiums for people in IRMAA territory run from roughly $284 a month at the first tier up to about $690 a month at the top tier, which kicks in around $500,000 for single filers and $750,000 for joint filers. Part D surcharges layer on separately and range from about $14.50 to $91 a month per person.

What that means in real dollars

Consider the arithmetic at the first joint-filer threshold. A married couple with a MAGI of $219,000 has crossed the $218,000 line by $1,000. Both spouses pay the surcharge, because IRMAA is assessed per person on Medicare. Between the two of them, the Part B increase alone runs a little over $1,900 a year compared with a MAGI of $217,000. Add the Part D surcharge and it’s closer to $2,300.

Roughly two thousand dollars triggered by a thousand dollars of income. That’s the cliff.

Why the Two-Year Lookback Catches People

Here’s the wrinkle that catches the most people: IRMAA for 2026 is based on your 2024 tax return. Social Security uses the most recent return the IRS has on file, which is always two years behind.

So the income that determines your premium today is income you earned back when you may still have been working full time. This lands hardest on people who recently wrapped up a long career — including many who spent it at Wright-Patterson or one of the other large employers around the Miami Valley. Your last full year of salary — plus maybe a payout of accumulated leave — sets your Medicare premium for the first year or two of retirement, when your actual income has dropped by half.

Other common triggers around here:

  • Selling a home or rental property, especially one held a long time with a large gain
  • Converting a traditional IRA to a Roth
  • Taking a large one-time distribution to pay off a mortgage or help a child
  • A deferred compensation payout or pension lump sum
  • Inheriting an IRA and being required to draw it down

Every one of those can push a normally modest-income household over a bracket line for a single year — and then cost them for a full year of premiums two years later.

Appealing IRMAA After a Life Change

This is the piece most people don’t know exists, and it’s the single most valuable thing in this article.

If your income dropped because of a qualifying life-changing event, you can ask Social Security to use your current income instead of the two-year-old return. You file Form SSA-44, “Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event.”

The qualifying events are specific:

  • Marriage, divorce or annulment, or death of a spouse
  • You or your spouse stopped working or reduced hours
  • Loss of income-producing property due to a disaster or other event outside your control
  • Loss or reduction of a pension
  • Receipt of a settlement from an employer due to closure or bankruptcy

Retirement counts. “Work stoppage” is a qualifying event, and it’s the one most new retirees should be using. If you retired in 2025 and your 2024 return shows a full year of salary, you can file SSA-44 with an estimate of your 2026 income and documentation — a letter from your employer, a final pay stub, or your retirement paperwork.

What does not qualify is just as important. Selling a property, doing a Roth conversion, or taking a big IRA distribution are not life-changing events. Those are voluntary decisions, and Social Security will not reduce your surcharge because of them. You can appeal, but you’ll lose.

How to file

You can mail SSA-44 or bring it to a Social Security office. The Dayton field office handles Montgomery and surrounding counties, and Greene County residents are typically served from there as well. Bring documentation — an unsupported estimate usually gets rejected. Most people hear back within four to eight weeks, and approved adjustments are retroactive to the start of the year in question.

Planning Moves That Actually Help

Since you can’t appeal your way out of a Roth conversion or a property sale, the planning has to happen before the money moves.

Know where the line is before you pull the trigger. If you’re considering a $60,000 Roth conversion and it would put you $4,000 over a bracket, converting $56,000 instead costs you almost nothing in lost opportunity and saves you the surcharge. This math is worth running before year-end, while there’s still time to adjust.

Spread big moves across tax years. A conversion split across December and January is two tax years instead of one. Same with realizing capital gains.

Do your conversions before 63. Because of the two-year lookback, income earned at age 63 affects your premium at 65. Conversions done at 60, 61, or 62 never touch IRMAA at all. For anyone who retires early, those pre-63 years are the cheapest window you’ll ever get.

Use qualified charitable distributions. Once you’re 70½, you can send money from your IRA directly to charity, up to an annual limit set by the IRS and adjusted for inflation. It satisfies your RMD and never appears in your MAGI. Writing a check from your checking account doesn’t do that — the RMD still counts as income first.

Remember the home sale exclusion. If you’ve lived in your house two of the last five years, $250,000 of gain is excluded for a single filer and $500,000 for a couple. Only the gain above that shows up in MAGI. A lot of Miami Valley retirees downsizing out of a long-held home are fine — but if you’ve been in the same Oakwood or Centerville house since the 1980s, run the numbers first.

Watch the survivor trap. When one spouse dies, the survivor files as single the following year. Same household income, half the bracket width. Widows and widowers sometimes hit IRMAA for the first time at exactly the moment their household income went down.

Common Questions We Hear

Does Social Security count toward IRMAA?

The taxable portion of your Social Security does count in MAGI. How much is taxable depends on your other income, up to a maximum of 85%.

Do I get a warning?

You’ll receive a determination notice from Social Security, usually in November or December, telling you what you’ll pay starting in January. That notice includes appeal instructions. Don’t throw it away.

Is IRMAA permanent?

No. It’s recalculated every single year against a fresh tax return. A one-time spike costs you one year of surcharges, not a lifetime. That’s good news for anyone worried about a property sale.

Does my Medicare Advantage plan change this?

Not really. You still pay your Part B premium plus any IRMAA even if you’re enrolled in an Advantage plan, and the Part D surcharge applies to the drug coverage built into that plan.

Getting a Second Set of Eyes

IRMAA sits right at the intersection of Medicare and tax planning, which is exactly why it slips through the cracks. Your tax preparer is looking backward at last year’s return. Your Medicare agent is looking at plan options. Somebody has to look at both at once, ideally in October or November before the year closes.

Medicare & Retirement Solutions Group in Beavercreek works with retirees across the Dayton area and Miami Valley on exactly this: where your income is landing, whether a bracket is within reach, and whether an SSA-44 appeal makes sense. There’s no charge for the conversation and no obligation on the other end of it.

If you’ve gotten a letter you don’t understand, or you’re planning a Roth conversion or a home sale and want to know what it’ll cost you two years out, give us a call or reach out through medretiregroup.com. It’s a lot easier to plan around IRMAA than to argue with it after the fact.

Sources

Figures in this article come from the following official sources, current as of publication:

This article is for general educational purposes and isn’t individualized tax or financial advice. IRMAA brackets and premium amounts are adjusted annually — confirm current-year figures with Social Security or Medicare.gov, and talk with your tax professional before making decisions based on bracket thresholds.

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