Your 2026 Tax Return Sets Your 2028 Medicare Premium
Many people meet the Medicare income surcharge the same way. An envelope arrives, the premium is higher than expected, and there is no obvious explanation for why.
The explanation is on a tax return filed two years earlier. Medicare sets each person's Part B and Part D premiums from the modified adjusted gross income on their federal return from two years before, so the income a California household recognizes in 2026 sets what it pays for Medicare in 2028. It applies to anyone on Medicare, or approaching it, whose income in a given year rises above $109,000 filing single or $218,000 filing jointly.
This article covers how that surcharge is priced, why the income it reads is already two years old by the time you pay, and which decisions made before December 31, 2026 will show up in a 2028 premium.
How Does Medicare Decide Who Pays a Higher Premium?
The surcharge is called the Income-Related Monthly Adjustment Amount, or IRMAA. It is added on top of the standard Part B and Part D premiums once income crosses a threshold.
The income it uses is your modified adjusted gross income from two years prior. Your 2026 premium was set by your 2024 return. Your 2027 premium comes from 2025. The income you recognize this year, in 2026, sets what you pay in 2028.
That figure is your adjusted gross income plus tax-exempt interest. Municipal bond interest, which adds nothing to your federal tax bill, counts in full here.
For 2026, the standard Part B premium is $202.90 per month. At the highest income tier it reaches $689.90. Part D surcharges run from $14.50 to $91.00 per month on top of whatever your drug plan charges. CMS estimates that approximately 8% of people with Part B pay an income-related amount.
| 2024 MAGI, single | 2024 MAGI, joint | 2026 Part B premium (monthly) | 2026 Part D surcharge (monthly) |
|---|---|---|---|
| $109,000 or less | $218,000 or less | $202.90 | $0.00 |
| Above $109,000 to $137,000 | Above $218,000 to $274,000 | $284.10 | $14.50 |
| Above $137,000 to $171,000 | Above $274,000 to $342,000 | $405.80 | $37.50 |
| Above $171,000 to $205,000 | Above $342,000 to $410,000 | $527.50 | $60.40 |
| Above $205,000 and below $500,000 | Above $410,000 and below $750,000 | $649.20 | $83.30 |
| $500,000 or more | $750,000 or more | $689.90 | $91.00 |
Source: Centers for Medicare & Medicaid Services, 2026 Medicare Parts A & B Premiums and Deductibles. Married couples filing separately follow a different schedule. The 2027 figures had not been published at the time of writing.
Why Is IRMAA a Cliff Instead of a Bracket?
Income tax brackets are marginal. Earn one dollar into a higher bracket and only that dollar is taxed at the higher rate.
IRMAA does not work that way. Cross a threshold by any amount and the full surcharge for that tier applies for the entire year, to each spouse who is on Medicare, on Part B and Part D alike.
A couple whose 2026 modified AGI lands one dollar above $218,000 pays the same surcharge in 2028 as a couple at $270,000. The dollar that crossed the line costs as much as the $52,000 that followed it.
There are five surcharge tiers for 2026, beginning at $109,000 single and $218,000 joint and topping out at $500,000 single and $750,000 joint. Each one is a cliff.
Which Decisions Raise a Future Medicare Premium?
This is the part that makes IRMAA hard to plan around. The move that raises your premium is rarely something you would file under healthcare.
Over the past several months we have written about five situations on their own. Every one of them lands on the return Medicare will read.
A home sale. Gain above the home-sale exclusion is taxable income. California taxes capital gains as ordinary income, with no lower rate for long-term gains, at rates up to 13.3%. A single transaction can move a household through more than one IRMAA tier.
A retroactive benefit payment. When a lump sum arrives covering several prior years, as many did after the WEP repeal, it can concentrate income in the year it is received even though it was earned across many.
Company stock and net unrealized appreciation. An NUA election concentrates a taxable event into a single year by design. That is often the right call. It is also a year in which modified AGI runs unusually high.
A first year filing single. After a spouse dies, the surviving spouse eventually files as a single taxpayer, against thresholds half the joint amounts, often on income that did not fall by half.
A trust that inherits a retirement account. Distributions and the compressed trust rate schedule interact in ways that can push income into places nobody modeled.
Each of these is a reasonable decision or an unavoidable event. What they share is that they raise a bill nobody sees for two years.
Can You Change a Medicare Premium After the Year Ends?
Mostly, no. An amended return can correct an error in what was reported, but it cannot undo a conversion or a sale that already happened. And no plan election during Medicare's annual enrollment period, October 15 to December 7, changes the surcharge. That window governs coverage, not this part of the price.
Which leaves a narrow and specific opportunity: the year in progress.
A Roth conversion is the clearest example, because it is the one year-end decision where you choose the amount. Converting to a point below a threshold and stopping is a different plan from converting past one you did not know existed. Both may be defensible. Only one of them was a decision.
The same logic applies to the timing of a property sale, whether to realize capital gains this year or next, and whether a qualified charitable distribution can keep modified AGI under a line.
This is what the Tax Management Journey® is built to evaluate: how income recognized now moves brackets, Social Security taxation, and Medicare premiums across the years that follow, rather than one filing year in isolation. A conversion that looks efficient against next April's return can look different once the 2028 premium is part of the arithmetic.
What to Check Before December 31, 2026
If your income this year is unusual for any reason, such as a sale, a conversion, a lump sum, or a change in filing status, it is worth knowing where you land relative to the thresholds before the year closes rather than after.
If your income is steady and well below $109,000 single or $218,000 joint, this likely does not apply to you, and that is a useful thing to establish too.
For anyone already working with an advisor, the question worth asking is whether the 2028 premium is part of the conversation, or whether this year is being managed against this year's return alone.
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