The Income-Related Monthly Adjustment Amount — IRMAA — is a surcharge on Medicare Part B and Part D premiums that kicks in when your modified adjusted gross income exceeds specific thresholds. The surcharge is based on your tax return from two years prior, which means 2025 premiums are driven by 2023 MAGI, and 2026 premiums will be driven by 2024 MAGI. For 2025, the standard Part B premium is $185.00 per month, but a high-income beneficiary can pay as much as $691.90 per month — a difference of more than $6,400 per year. The brackets are not indexed for inflation in the way tax brackets are, which means more beneficiaries cross into the surcharge tiers each year as nominal incomes rise. Understanding the tier structure, the lookback, and the appeal rights is essential for anyone in the upper brackets and especially for retirees executing large Roth conversions.
What IRMAA Is and How It Is Calculated
IRMAA was created by the Medicare Modernization Act of 2003 and first took effect in 2007, with a single surcharge tier above a $80,000 MAGI threshold for individuals. The Affordable Care Act of 2010 added additional tiers and froze the threshold dollar amounts, which had the effect of pushing more beneficiaries into the surcharge brackets over time as nominal incomes rose. Today, the surcharge applies to beneficiaries whose MAGI — defined as adjusted gross income plus tax-exempt interest — exceeds $106,000 for single filers or $212,000 for married filing jointly in 2025.
The calculation is mechanical. The Social Security Administration receives your MAGI directly from the IRS, matches it to your Medicare record, and assigns you to one of six tiers (the standard tier plus five surcharge tiers). You receive an initial determination notice (Form SSA-44-L) in the mail showing your tier, your MAGI, and your new premium. The determination is annual — SSA re-runs the calculation each year based on the most recent tax return the IRS has on file, which is typically the return from two years prior. There is no separate filing required to trigger the surcharge; it is automatic based on the data match.
The Two-Year MAGI Lookback and Why Timing Matters
The two-year lookback is the feature that catches most retirees by surprise. Your 2025 Medicare premiums are based on your 2023 tax return — the most recent return the IRS had available when SSA ran the determination in late 2024. Your 2026 premiums will be based on your 2024 return. This lag means that a large one-time income event — a Roth conversion, a business sale, a large capital gain harvesting, an inheritance of a traditional IRA — can trigger two years of IRMAA surcharges in the years following the event.
Consider a retiree who executes a $300,000 Roth conversion in 2024. The conversion adds $300,000 to 2024 MAGI, which will trigger IRMAA surcharges on 2026 Medicare premiums. If the same retiree had executed the conversion in 2023, the surcharges would have hit 2025 premiums. This is why Roth conversion planning often involves spreading conversions across multiple years to stay just below the next IRMAA bracket threshold, rather than maximizing the conversion in a single year. A $1,000 overage into the next tier can cost $1,000 or more in additional annual premiums, producing marginal tax rates that exceed 40% on the converted dollars.
The 2025 Part B Premium Tiers
The 2025 Part B premium tiers are set by statute and adjusted annually. The standard premium — paid by beneficiaries with MAGI at or below $106,000 (single) or $212,000 (MFJ) — is $185.00 per month. Above those thresholds, five surcharge tiers apply. Tier 1, for MAGI above $106,000 up to $133,000 (single) or above $212,000 up to $266,000 (MFJ), adds $74.00 per month, bringing the total premium to $259.00. Tier 2, for MAGI above $133,000 up to $167,000 (single) or above $266,000 up to $334,000 (MFJ), adds $185.00, for a total of $370.00. Tier 3, for MAGI above $167,000 up to $200,000 (single) or above $334,000 up to $400,000 (MFJ), adds $295.90, for a total of $480.90.
The top two tiers apply to the highest earners. Tier 4, for MAGI above $200,000 up to $500,000 (single) or above $400,000 up to $750,000 (MFJ), adds $406.90 per month, for a total of $591.90. Tier 5, for MAGI above $500,000 (single) or above $750,000 (MFJ), adds $506.90, for a total of $691.90. A married couple both enrolled in Part B and at the top tier pays $1,383.80 per month in Part B premiums alone, or $16,605.60 per year — more than three times the standard couple's premium. The tiers are based on the joint MAGI, not split per spouse, which means a high-earning couple pays the surcharge on both spouses' premiums.
Part D IRMAA: A Separate Surcharging Layer
Part D — the voluntary prescription drug benefit delivered through private insurers — has its own IRMAA structure that runs parallel to Part B. The Part D IRMAA is a flat dollar amount per tier, added on top of whatever your plan's base premium is. For 2025, the Part D surcharge amounts are: $12.90 per month for Tier 1; $33.30 for Tier 2; $53.80 for Tier 3; $74.20 for Tier 4; and $81.00 for Tier 5. The tiers use the same MAGI thresholds as Part B, so a beneficiary in Tier 3 for Part B is also in Tier 3 for Part D, but the surcharge amounts differ.
The Part D IRMAA is paid directly to Medicare, not to your Part D plan sponsor, and is typically withheld from your Social Security benefit if you are receiving one. If you are not yet receiving Social Security, Medicare sends a quarterly bill. The combination of Part B and Part D IRMAA can push total Medicare premiums above $8,500 per year for a high-earning beneficiary, and above $17,000 for a high-earning couple both enrolled. The surcharges are also not deductible as medical expenses for most taxpayers, because they exceed the 7.5% AGI threshold only in unusual cases.
Appealing With Form SSA-44: Life-Changing Events
IRMAA can be appealed when your current income is lower than the income used for the determination, due to a "life-changing event" defined in 42 U.S.C. § 1395r(q)(4)(C). The qualifying events are: marriage, divorce, death of a spouse, work stoppage (retirement or semi-retirement), work reduction (reduced hours or reduced pay), loss of income-producing property due to disaster, loss of pension income, or receipt of a settlement from a current or former employer. The most common appeal is for retirement: a retiree whose 2023 MAGI included a full year of wages but who retired in 2024 can use Form SSA-44 to request a new determination based on their 2025 projected income.
The form requires documentation of both the life-changing event and the new, lower income estimate. Acceptable documentation includes a retirement letter from the employer, a final pay stub, a pension award letter, and a signed estimate of 2025 income. The SSA has 30 days to respond to the request, and the new determination is retroactive to the month the life-changing event occurred. If the appeal is denied, the beneficiary can request reconsideration, then a hearing before an administrative law judge. The success rate for life-changing-event appeals is high when documentation is clean — particularly for retirement and work reduction events — but appeals that simply argue the surcharge is unfair are routinely denied.
Roth Conversions and Other Planning Traps
Roth conversions are the single most common IRMAA trigger, because a conversion is taxed as ordinary income in the year executed and flows fully into MAGI. A retiree with $80,000 of pension and Social Security income who converts $150,000 from a traditional IRA to a Roth IRA pushes 2025 MAGI to $230,000 — squarely in Part B Tier 2 and Part D Tier 2 for 2027 Medicare premiums. The combined surcharge is $185.00 (Part B) plus $33.30 (Part D), or $218.30 per month, which is $2,619.60 per year in additional Medicare premiums attributable to the conversion. This effectively raises the marginal tax rate on the converted dollars by roughly 1.75 percentage points, on top of the ordinary income tax.
Several planning strategies address this. First, time conversions to fall in years before Medicare enrollment, so the conversion income never triggers IRMAA. Second, spread conversions across multiple years to stay within a single IRMAA tier, accepting a slightly higher conversion in the year of the lowest marginal rate. Third, use Qualified Charitable Distributions (QCDs) from a traditional IRA, which reduce MAGI dollar-for-dollar for those 70½ and older, up to $108,000 per year in 2025. Fourth, recognize that the lookback means conversions executed in your last year before Medicare enrollment will affect premiums in your second year of Medicare — a particular trap for those who retire at 64 and convert at 64 or 65. To estimate your premium at any MAGI level, our retirement income calculator handles the bracket mapping and combines Part B and Part D surcharges into a single annual figure.
For the broader question of how Roth conversions interact with required minimum distributions later in retirement, see our RMD rules guide, which explains how pre-age-73 conversions can reduce lifetime RMD burden and lower the long-term tax cost of tax-deferred savings.
Last reviewed May 25, 2026. This article is informational and does not constitute legal, tax, or financial advice. Consult a qualified professional for guidance specific to your situation.