How IRMAA works
IRMAA stands for income-related monthly adjustment amount. Most people pay the standard Part B premium of $202.90 a month in 2026. If your income is above the first bracket line, Social Security adds an amount to your Part B premium and a separate surcharge for Part D drug coverage. The Part D surcharge applies to any Part D coverage: a standalone drug plan, a Medicare Advantage plan with drug coverage, or a group plan with Part D such as the State Health Plan's Base Plan and Enhanced Plan. It is paid to Medicare, not to the plan.
Three things surprise people:
- It looks back two years. Your 2026 premium uses your 2024 tax return. A big income year in your last year of work, or a lump sum at retirement, can raise your premium in your first years of retirement.
- The brackets are cliffs. Going one dollar over a line raises the premium for the whole year. It is not a tax on the dollars above the line.
- It is recalculated every year. If your income falls, your premium falls too, two years later or sooner if you file Form SSA-44.
Pay the Part D surcharge on time. Medicare bills the Part D IRMAA separately from your plan. Under federal rules, CMS disenrolls people from Part D coverage when they don't pay it (42 CFR 423.44(e)). If you're in the State Health Plan's Base Plan or Enhanced Plan, your drug coverage is part of that plan, so treat the bill from Medicare as seriously as a premium.
What pushes North Carolina retirees into a bracket?
IRMAA uses federal modified adjusted gross income: the adjusted gross income on your federal Form 1040 plus tax-exempt interest. North Carolina has a state income tax, but your NC return, and any North Carolina deductions or exclusions on it, isn't part of the calculation. These are the income sources that most often push North Carolina retirees over a line:
- Public pensions. The taxable part of a pension counts in full on your federal return. That includes TSERS (the Teachers' and State Employees' Retirement System), LGERS (the Local Governmental Employees' Retirement System, for city, county and other local workers), the Consolidated Judicial and Legislative Retirement Systems, and federal civil service pensions. A couple with two public pensions can cross the joint line without much other income.
- Military retired pay. North Carolina is home to Fort Bragg, Camp Lejeune, Seymour Johnson Air Force Base and Marine Corps Air Station Cherry Point, and many military retirees stay. Taxable retired pay counts for IRMAA even if it isn't taxed the same way on your state return. VA disability compensation isn't taxable income, so it doesn't count.
- Required minimum distributions. Withdrawals from traditional IRAs, 401(k)s and 403(b) or 457 plans, including the state's supplemental retirement plans for public employees, are taxable income, and they grow as you age.
- Roth conversions. The converted amount counts in the year you convert. Spreading conversions over several years can keep you under a line.
- Selling a home, land or a business. Capital gains above the home-sale exclusion count. Selling a house up north to move here, selling a second home at the coast or in the mountains, or selling farmland or timberland can raise your premiums two years later.
- Taxable Social Security. The taxable part of your benefit is included in federal adjusted gross income. Most North Carolina public employees already pay into Social Security: in 2023, 92.7% of the state's state and local government workers had Social Security coverage, according to the Congressional Research Service.
Tip: If you are 70½ or older and give to charity, a qualified charitable distribution sent straight from your IRA to the charity can count toward your required minimum distribution without being added to your adjusted gross income. The 2026 limit is $111,000 per person. Ask a tax professional whether it fits your situation.
What are the 2026 IRMAA brackets?
Income is 2024 MAGI. The Part B amount is the full monthly premium; the Part D amount is added to whatever your drug plan charges.
| Single (and head of household) | Married filing jointly | Part B premium | Part D surcharge |
|---|---|---|---|
| $109,000 or less | $218,000 or less | $202.90 | $0 |
| $109,001 to $137,000 | $218,001 to $274,000 | $284.10 | +$14.50 |
| $137,001 to $171,000 | $274,001 to $342,000 | $405.80 | +$37.50 |
| $171,001 to $205,000 | $342,001 to $410,000 | $527.50 | +$60.40 |
| $205,001 to $499,999 | $410,001 to $749,999 | $649.20 | +$83.30 |
| $500,000 or more | $750,000 or more | $689.90 | +$91.00 |
If you are married, lived with your spouse at any time in 2024 and filed separately, the brackets are different: $109,000 or less pays the standard premium, $109,001 to $390,999 pays $649.20 (Part D +$83.30), and $391,000 or more pays $689.90 (Part D +$91.00). The calculator handles this when you pick "Married filing separately". The 2027 brackets, based on 2025 income, aren't published yet; see Medicare costs in 2027.
Does IRMAA apply with State Health Plan coverage?
Yes. Social Security sets and bills IRMAA, not the State Health Plan or the Retirement Systems Division, so it applies however you get your retiree coverage:
- Base Plan or Enhanced Plan. The Plan's two group Medicare Advantage options include group Part D drug coverage, so a retiree over a bracket line pays both the higher Part B premium and the Part D surcharge.
- 70/30 Plan. For Medicare retirees the 70/30 Plan pays after Original Medicare. The Part B part of IRMAA applies to you as to anyone with Part B. Whether a Part D surcharge applies depends on whether you have Part D coverage; the Plan's own materials explain how its drug coverage works.
- LGERS retirees. Retiree health coverage, if any, depends on your former employer. IRMAA works the same way whatever that coverage is.
Switching to an outside plan doesn't avoid the surcharge, because it applies to any Part D coverage. And the Plan says enrolling in another Medicare health or drug plan removes you from its group Medicare Advantage plan and moves you to the 70/30 Plan. See State Health Plan retirees and Medicare.
How do I ask Social Security to use newer income?
If your income has dropped because of a life-changing event, you can ask Social Security for a new decision with Form SSA-44. The events Social Security accepts are marriage, divorce or annulment, death of a spouse, work stoppage, work reduction, loss of income-producing property, loss of pension income, and an employer settlement payment. Retiring from a school system, a city or county, the state, the military or any other job counts as a work stoppage, the most common reason retirees file.
- Fill out Form SSA-44. List the event, its date, and your estimated income for the year.
- Attach proof. For example, a letter from your employer or the Retirement Systems Division showing your last day of work or your retirement date, or a death certificate.
- Send it to Social Security. Mail it or bring it to a local Social Security office. If Social Security agrees, it recalculates your premium from your newer income.
If you disagree with the income Social Security used, for example because the IRS data was wrong or you amended your return, you can also ask for a reconsideration. See how to appeal IRMAA after retiring, Medicare costs in 2026 and Medicare Part B. For questions about plan choices at your income, you can request a call from a licensed insurance agent.
Sources
- CMS — 2026 Medicare Parts A & B premiums and deductibles (IRMAA tables)
- Social Security — Premiums: rules for higher-income beneficiaries
- Social Security POMS HI 01101.010 — Modified adjusted gross income and the tax year used
- Social Security — Form SSA-44, Medicare income-related monthly adjustment amount, life-changing event (PDF)
- eCFR — 42 CFR 423.44, Involuntary disenrollment (failure to pay the Part D IRMAA)
- IRS — Retirement plan and IRA required minimum distributions FAQs (qualified charitable distributions)
- State Health Plan — 2027 plan comparison for Medicare-primary members (PDF)
- NC Retirement Systems (ORBIT Help) — Health benefit coverage for other retirement system retirees (LGERS)
- Congressional Research Service — Social Security coverage of state and local government employees (R46961)
Frequently asked questions
What are the IRMAA brackets for 2027?
CMS hasn't published them yet. They come with the 2027 Part B premium announcement in the fall and will apply to income on your 2025 federal tax return. Until then, this calculator uses the 2026 brackets, which apply to 2024 income.
Why is my Part B premium higher than the standard amount?
Most likely because of IRMAA: your modified adjusted gross income two years earlier was above the first bracket line, so Social Security added an income-related amount. It can also be a Part B late enrollment penalty. Social Security's yearly notice explains which, and you can ask for a new decision if your income has dropped.
Which year's income sets my 2026 IRMAA?
Social Security uses the modified adjusted gross income (MAGI) on your 2024 federal tax return, the most recent one the IRS gives it. MAGI is your adjusted gross income plus any tax-exempt interest. If the 2024 return isn't available, Social Security may use 2023 and update it later.
Does my TSERS or LGERS pension count toward IRMAA?
Yes. The taxable part of any pension counts on your federal return, whether it comes from TSERS, LGERS, the judicial or legislative system, the military, the federal government or a private employer. So do required minimum distributions, Roth conversions, capital gains and the taxable part of your Social Security.
Does IRMAA apply if I'm on the State Health Plan's Medicare Advantage plan?
Yes. Social Security sets IRMAA for everyone with Part B, whatever other coverage you have. The Plan's Base Plan and Enhanced Plan include group Part D drug coverage, so the Part D surcharge applies too if your income is over a line. Medicare bills it, not the Plan.
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