Medicare Part D

How Your 2024 Income Sets Your 2026 Medicare Costs

MAPLE VALLEY, Wash. — As open enrollment runs through Dec. 7, thousands of local Medicare beneficiaries are opening letters from Social Security that explain what their Part B and Part D premiums will look like in 2026. For most people, the standard premium applies. But for higher earners, an extra charge called IRMAA — the Income-Related Monthly Adjustment Amount — kicks in. And the income Medicare is looking at isn't this year's. It's from your 2024 tax return.

Maple Valley retirees: your tax return is talking to Medicare

That two-year lookback catches a lot of people off guard, especially newer retirees who earned more before leaving work.

What IRMAA is, in plain English

IRMAA is a surcharge added to your Part B premium and your Part D premium when your income is above a set threshold. It is not a penalty. It is not tied to whether you signed up on time. It is simply a higher premium for people whose reported income puts them in a higher bracket.

Social Security uses your Modified Adjusted Gross Income (MAGI) from your IRS return two years back. So your 2026 premiums are based on the tax return you filed in 2025 for tax year 2024.

The 2026 income thresholds

For 2026, IRMAA begins when a single filer's MAGI is above $109,000, or above $218,000 for a couple filing jointly. If your income is at or below those numbers, you pay the standard Part B premium and no Part D surcharge.

Above those thresholds, there are several brackets that step up as income rises. The highest bracket applies to single filers with MAGI at or above roughly $500,000 (and married couples at or above roughly $750,000). Each step adds a set dollar amount to both your Part B and your Part D premium.

Medicare.gov publishes the full 2026 bracket table under "Costs" once figures are finalized — that's the source to rely on rather than word of mouth.

Why so many people get surprised

A few common reasons Maple Valley readers tell us they were caught off guard:

• A one-time income event in 2024 — selling a home, cashing out stock, a Roth conversion, or an inherited IRA distribution — pushed MAGI over a line.
• Both spouses' incomes are counted together on a joint return, and one large year can lift both premiums.
• Tax-exempt interest counts. MAGI adds municipal bond interest back in, which surprises people who thought it wouldn't affect Medicare.
• The two-year lag. You may already be fully retired in 2026 while still paying premiums based on your final working year.

You can appeal after a life-changing event

If your income dropped because of a specific event, you can ask Social Security to use more recent numbers. Qualifying "life-changing events" include:

• Marriage, divorce, or the death of a spouse
• You or your spouse stopped working or cut back hours
• Loss of income-producing property (not due to a sale)
• Loss or reduction of a pension
• A settlement from a former employer

The form is SSA-44, available at ssa.gov. Bring documentation — a letter from a former employer, a death certificate, or a divorce decree. This is one of the most under-used tools in Medicare, and it's worth knowing about before you assume the bill is final.

How this fits with other 2026 changes

Two other numbers worth keeping in mind as you plan:

• The Part D out-of-pocket cap is $2,100 in 2026. Once your covered drug spending hits that limit, you pay $0 for the rest of the year.
• The Part D maximum deductible is $615.
• The Medicare Prescription Payment Plan lets you spread drug costs across the calendar year in monthly installments instead of paying at the pharmacy counter. It doesn't lower the total, but it can smooth cash flow — especially useful if a big prescription hits in January.

Maple Valley is in King County, where a wide range of stand-alone Part D and Medicare Advantage options are offered each year. IRMAA applies the same way regardless of which plan you choose — it's tied to your income, not your plan.