IRMAA Two-Year Lookback Rule: How Medicare Sets It

The IRMAA (Income-Related Monthly Adjustment Amount) surcharge you pay in 2026 is based on the income you reported two years earlier, on your 2024 tax return, not your current income. The Social Security Administration (SSA) calls this the two-year lookback: it uses your modified adjusted gross income (MAGI), which is your adjusted gross income plus tax-exempt interest, from two years before the plan year to decide whether you owe an extra amount on top of your standard Medicare Part B and Part D premiums. If your income has dropped since then because you retired, stopped working, or lost a spouse, you don't have to wait for the lookback to catch up. You can ask SSA to use more current information instead.

Why Medicare Uses Income From Two Years Ago

Medicare relies on the Internal Revenue Service (IRS) to supply income data, and the most recent complete tax return available when premiums are calculated for the coming year is typically from two years prior. When SSA set 2026 premiums, full 2025 tax return data was not yet processed across the system, so it used 2024 MAGI instead. This lag means a one-time bump in income, such as a large retirement account withdrawal, a home sale, or a final year-end bonus, can trigger a higher premium two years later, even after your income has returned to normal. You can read more about how the surcharge fits into your total premium in our guide to medicare irmaa.

2026 Income Thresholds and Why They Change Every Year

The income thresholds that trigger IRMAA adjust for inflation annually, so a number that applied last year may not apply this year. For 2025, the lowest IRMAA tier began at $106,000 in MAGI for an individual filer and $212,000 for a married couple filing jointly, according to the Social Security Administration. Five additional tiers raise the surcharge further as income rises, and Part D IRMAA is assessed the same way, as a flat add-on to your plan's regular premium. Because these dollar amounts shift each year, confirm the current brackets in our guide to the medicare part b premium 2026 before assuming last year's figures still apply. For context on how this surcharge interacts with your total annual spending, see our guide to the medicare out of pocket maximum.

What Counts as a Life-Changing Event

If your MAGI two years ago was higher than it is now, SSA lets you request a new IRMAA determination based on more recent income instead of waiting for the lookback to update. SSA recognizes seven qualifying events for this purpose, according to the Social Security Administration:

• Marriage
• Divorce or annulment
• Death of a spouse
• Work stoppage or retirement
• Work reduction (fewer hours or reduced income)
• Loss of income-producing property because of a disaster or other event beyond your control
• Loss or reduction of pension income, including an employer's bankruptcy or reorganization

A drop in income that isn't tied to one of these seven events, such as normal market losses on investments, generally doesn't qualify for a new determination through this process.