Income for IRMAA — Medicare’s income-related premium surcharge — means modified adjusted gross income, or MAGI: your adjusted gross income (line 11 of Form 1040) plus tax-exempt interest from line 2a. In practice that captures wages, self-employment income, traditional IRA and 401(k) withdrawals, Roth conversions, pensions, capital gains, dividends, rental income, the taxable portion of Social Security, and even municipal bond interest that is otherwise tax-free.
Revised: 7/24/26
Jason Baar
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See how the 2026 IRMAA brackets work, why Medicare looks back two years, and which planning moves can help you stay under the lines. No email address or form.
The long answer
The municipal bond add-back is the one that surprises people most. Interest that never appears in your taxable income still counts toward IRMAA, dollar for dollar.
Just as useful is the list of what does not count: qualified Roth IRA withdrawals, HSA withdrawals used for medical expenses, life insurance proceeds, gifts and inheritances you receive, and borrowed money such as reverse-mortgage draws. When you sell an investment, only the gain counts — the return of your original principal does not.
Medicare tests this figure against thresholds of $109,000 for single filers and $218,000 for joint filers in 2026, per the Social Security Administration, using your return from two years earlier. To see where you stand for 2026, the arithmetic takes a minute: pull the 2024 return, add line 2a to line 11, and compare.
Printed from JasonKnowsMedicare.com — “What Counts as Income for IRMAA?”. The free IRMAA Planning Guide is available at JasonKnowsMedicare.com/pages/free-medicare-guides · Questions: (850) 810-1000
You can find all 10 free Medicare guides as PDFs on the Free Medicare Guides page.
This page is educational information, not personal financial, tax, or legal advice. For decisions about your own situation, talk with a qualified professional.