Medicare Part D
How your 2025 tax return could raise your 2027 Medicare premiums in McKinney
McKINNEY, Texas — As the Medicare Annual Enrollment Period runs through Dec. 7, many local retirees are getting a first look at their 2027 premiums — and some are noticing an unfamiliar line item. It is called IRMAA, short for the Income-Related Monthly Adjustment Amount, and it is the reason two neighbors on the same street can pay very different amounts for the same Medicare coverage in 2027.
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Key takeaways
- IRMAA surcharges on Part B and Part D in 2026 start above $109,000 in income for a single filer, based on your 2024 tax return.
- The extra amount is added to your monthly premium — Part B is billed by Medicare, and the Part D surcharge is billed separately even if your drug plan premium is not.
- If your income has dropped because of a life event like retirement, you can ask Social Security to recalculate using Form SSA-44.
- The Annual Enrollment Period ends Dec. 7, and Medicare Advantage Open Enrollment runs Jan. 1 through March 31.
IRMAA is not a penalty. It is an extra charge added to Part B and Part D premiums when your income is above certain limits. What surprises people most is the timing: your 2027 surcharge will be based on the tax return you filed in 2026, which reported your 2025 income. So a good year two years ago can follow you into next year's premium.
What IRMAA actually is
Most people on Medicare pay the standard Part B premium and whatever their Part D drug plan charges. But if your income is above a threshold set by the Social Security Administration, you pay that standard amount plus an IRMAA surcharge. The surcharge climbs in steps — the higher your income, the higher the bracket.
For 2026, the first IRMAA bracket kicks in above $109,000 for a single filer (and roughly double that for a married couple filing jointly). If your income is at or below that number, IRMAA does not apply to you at all.
Why 2027 premiums look back at 2025
Social Security uses your most recent tax return on file, which is almost always from two years earlier. So:
- Your 2026 Part B and Part D premiums are based on your 2024 income.
- Your 2027 premiums will be based on your 2025 income.
This two-year lookback catches people off guard, especially those who sold a home, took a large IRA withdrawal, converted a traditional IRA to a Roth, or had a one-time capital gain in 2024. Even a single high-income year can push you into an IRMAA bracket for one year.
How the surcharge is billed
The Part B surcharge is added to your regular Part B premium, usually deducted from your Social Security check. The Part D surcharge is a separate bill from Medicare — it does not go to your drug plan. That is true even if you enrolled in a Medicare Advantage plan that includes drug coverage. McKinney is in Collin County, where residents choose from a range of stand-alone drug plans and Medicare Advantage plans with drug coverage, but the IRMAA math works the same way across all of them.
If you do not pay the Part D IRMAA, you can lose your drug coverage — so it is important to open that mail when it arrives.
What to do if your income has dropped
Life-changing events happen, and Medicare recognizes many of them. If your income has fallen because of retirement, the death of a spouse, divorce, loss of a pension, or a similar event, you can file Form SSA-44 with the Social Security Administration and ask them to use a more recent year's income instead. If approved, your IRMAA can be reduced or removed for the year in question.
Retirement is the most common reason McKinney residents file this form — someone who earned a full salary in 2025 and stopped working in 2026 should not have to pay 2027 premiums as if they were still working.
Planning ahead
Because IRMAA is based on a single year of income, some retirees work with a tax professional to spread out large withdrawals, Roth conversions or asset sales across multiple years. Even staying a few thousand dollars below a bracket can matter, since IRMAA is a "cliff" — cross the line by one dollar and the full surcharge for that bracket applies for the whole year.
None of this is one-size-fits-all. A licensed tax professional or a counselor at Texas' State Health Insurance Assistance Program (SHIP) can walk through your specific numbers.
By the numbers
Medicare Part B premium, 2006–2026
The standard monthly Part B premium has climbed from $88.50 in 2006 to $202.90 in 2026. Hover any point for that year’s premium.
Source: CMS. Standard premium shown; in some hold-harmless years many existing enrollees paid less. Confirm at Medicare.gov.
By the numbers
How people get Medicare in Collin County
(MA penetration in Collin County)
MA penetration from CMS enrollment data; Medigap share is an estimate. U.S. average is about 54% Medicare Advantage. These are area-level figures, not plan-specific.
Higher-income surcharges
2027 IRMAA income brackets
If your income is above a threshold, you pay an income-related surcharge (IRMAA) on top of your Part B and Part D premiums. Your 2027 surcharge will be based on your 2025 tax return. CMS publishes the 2027 IRMAA brackets and surcharge amounts later in the fall, alongside the 2027 Part B figures.
| Income — single filer | Income — married, joint | Part B monthly premium | Part D surcharge |
|---|---|---|---|
| $109,000 or less | $218,000 or less | $202.90 | Plan premium only |
| $109,001 – $137,000 | $218,001 – $274,000 | $284.10 | + $14.50 |
| $137,001 – $171,000 | $274,001 – $342,000 | $405.80 | + $37.40 |
| $171,001 – $205,000 | $342,001 – $410,000 | $527.50 | + $60.40 |
| $205,001 – $500,000 | $410,001 – $750,000 | $649.30 | + $83.30 |
| Above $500,000 | Above $750,000 | $689.90 | + $91.00 |
Standard Part B premium is $202.90/month. Part D surcharges are added to your drug plan’s premium. Married-filing-separately uses a different, compressed schedule. Confirm current amounts at Medicare.gov.
Try it
Find your 2026 Medicare premium
Most people pay the standard Part B premium. If your 2024 income was higher, an income-related surcharge (IRMAA) applies. Enter your details to see your bracket.
Surcharges are added to your premiums and based on your 2024 tax return. Married-filing-separately uses a different schedule. Confirm at Medicare.gov.
Try it
How the 2026 Part D drug cap works
Slide to your estimated yearly prescription costs and see how the new $2,100 out-of-pocket cap protects you. This illustrates the standard Part D benefit; your plan may structure costs differently.
Once your out-of-pocket spending on covered drugs reaches $2,100, you pay nothing more for the rest of 2026. Confirm details at Medicare.gov.
Good to know
Frequently asked questions
Does IRMAA apply to everyone on Medicare?
What income does Social Security look at for IRMAA?
Can I appeal an IRMAA determination?
Does IRMAA change every year?
- CMS — Medicare costs & IRMAA (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.
Also for McKinney
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This page was last updated: October 7, 2026.