The IRMAA two-year lookback: which year's income counts

Why Medicare looks two years back

Social Security has to set your premium before the year begins, usually in the fall. At that point the most recent complete tax return the IRS can share is the one filed in the spring of the previous year, which covers the year before that. So the decision for 2026 premiums, made in late 2025, relies on 2024 income. It is a practical limit of the data, not a choice to look at old numbers.

The result is a two-year delay between earning income and paying for it in Medicare premiums. That delay is the most misunderstood part of IRMAA, and it is behind most surprise IRMAA letters.

Premium year and income year, side by side

Read the bottom row carefully. Anything you do with your income in 2026, from a Roth conversion to selling a rental property, will show up in your 2028 Medicare premiums.

A worked example

Robert worked until December 2024 and earned a final salary that brought his 2024 MAGI to $150,000. He retired, started Medicare in 2026, and now lives on a pension and Social Security that add up to about $70,000 a year. On the 2026 brackets, $150,000 of MAGI for a single filer lands in tier two:

Robert's retirement is a work stoppage, one of the life-changing events on Form SSA-44. If he files it with an estimate of his 2026 income, Social Security can use the lower figure, and his premium can drop to the standard amount. Without the form, he pays tier two for all of 2026 for income he no longer has.

When Social Security uses an older return

If you file late or on extension, your two-years-back return may not reach Social Security in time. In that case it uses the return from three years earlier. Once the more recent return is processed, Social Security should update your IRMAA automatically, and you can speed it up by sending a copy of the newer return. If the older year had higher income, this can mean a refund of overpaid premiums.

The same applies to amended returns. If you file a Form 1040-X that lowers the MAGI for the year Social Security used, send proof of the amended return and ask for the decision to be redone. That is a request for a new initial determination based on corrected information, not a life-changing event.

Planning around the lookback

• Age 63 is the first year that counts. Income at 63 sets the premium at 65, so Medicare planning starts two years before enrollment. See IRMAA planning at 63.
• Spread one-time income. Breaking a large Roth conversion into several years lets each year stay within its headroom. The Roth headroom finder shows the limit for a given year.
• Expect the bill later. If a spike in income is unavoidable, set aside the extra premium for two years out so the IRMAA letter is not a shock.
• Use Form SSA-44 for real life changes. Retirement, the death of a spouse, divorce and the other listed events let you skip the lookback for that year.

How the lookback plays out over a retirement

Think of the lookback as a conveyor belt. Each year of income sits on it for two years before it reaches your Medicare bill. A typical path looks like this: at 63 and 64 you are still working, and those salary years set your first two Medicare premiums at 65 and 66. At 65 you retire, so the premium at 67 is the first one based on retirement income. If you also start Roth conversions at 66, they reach your premiums at 68. Laying your plans on a timeline, income year next to premium year, makes it obvious which decisions are still open and which are already locked in.

The lookback also works in your favor once your income falls. A year of unusually low income, such as the first full year after retiring, produces a low premium two years later, even if your income has risen again by then through required distributions. Some retirees use exactly that gap to do conversions in the low years before RMDs begin.

Frequently asked questions

Sources

• Social Security POMS HI 01101.020: IRMAA tax year and MAGI
• Social Security: Premiums, rules for higher-income beneficiaries
• CMS: 2026 Medicare Parts B premiums and deductibles

Related guides

• How to appeal IRMAA
• What is IRMAA?
• Roth conversions and IRMAA