Medicare Part D

How your 2024 tax return can raise your 2026 Medicare Part B and Part D bills

LANCASTER, Texas — As Dallas County residents open 2026 Medicare mail this fall, some will notice a bill that looks higher than a neighbor's. The reason is usually not the plan — it is a surcharge called IRMAA, the Income-Related Monthly Adjustment Amount, and it is set by the tax return you filed two years ago.

Medicare Part DLancaster, TX

For 2026, the Social Security Administration generally looks at your 2024 income to decide whether you owe more for Part B and Part D. The first surcharge tier starts above $109,000 in modified adjusted gross income for a single filer. If you are shopping during the Annual Enrollment Period (Oct. 15 – Dec. 7) for 2027 coverage, it helps to understand how IRMAA works before you compare drug plans.

What is IRMAA and who in Lancaster has to pay it?

IRMAA is an income-based surcharge added to the standard Medicare Part B premium and to Part D drug coverage. Most people in Lancaster will not owe it. According to CMS, only beneficiaries with higher incomes pay the extra amount, and Social Security notifies you by mail if you are affected.

The surcharge is charged on top of whatever premium you already pay. For Part B, it is added to your monthly Part B bill (often deducted from Social Security). For Part D, it is billed separately by Medicare, even if your drug plan premium is paid through your insurer.

How does Medicare decide my 2026 income surcharge?

Medicare uses your most recent federal tax return on file, which is normally from two years earlier. So your 2026 IRMAA is based on your 2024 modified adjusted gross income (MAGI) — your adjusted gross income plus any tax-exempt interest.

For 2026, the first IRMAA tier starts above $109,000 for a single filer and above $218,000 for a married couple filing jointly. Income above those amounts moves you into higher tiers, each with a larger surcharge for both Part B and Part D. The exact bracket amounts are published by CMS at medicare.gov.

What should Lancaster residents do if their income has gone down?

If you had a major life change that lowered your income, you can ask Social Security to use a more recent year instead of your 2024 return. This is especially common for people who recently retired, cut back their hours, or lost a spouse.

The form is SSA-44, "Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event." Qualifying events include marriage, divorce, death of a spouse, work stoppage or reduction, loss of pension, and a few others listed on the form. You submit it to Social Security with documentation of the change.

How does IRMAA fit with the other 2026 Part D changes?

IRMAA is separate from the broader 2026 Part D redesign. In 2026, Part D has a $2,100 annual out-of-pocket cap on covered drugs and a maximum deductible of $615. The old coverage gap, or "donut hole," was eliminated starting in 2025, leaving three payment phases.

There is also the Medicare Prescription Payment Plan, an optional program that lets you spread your drug costs across the year in monthly installments instead of paying large amounts at the pharmacy counter. If you owe a Part D IRMAA, you still owe it on top of your plan premium — the smoothing program applies to drug costs, not surcharges.

When can Lancaster residents make Medicare changes for 2027?

The Annual Enrollment Period runs Oct. 15 through Dec. 7 each year. During that window, you can join, switch, or drop a Medicare Advantage or Part D drug plan for the following year. Changes made now take effect Jan. 1, 2027.

If you are already in a Medicare Advantage plan, you also have the Medicare Advantage Open Enrollment Period from Jan. 1 through March 31, when you can switch to a different Advantage plan or return to Original Medicare. Neither enrollment period changes your IRMAA — that is set by your tax return, not by the plan you pick.