Does capital gains affect IRMAA?

Yes. Realized capital gains are part of your AGI, so they raise your MAGI and can push you into a higher IRMAA tier in the year you realize them.

Is Social Security counted in MAGI for IRMAA?

Only the taxable portion of your Social Security benefits is in your AGI and counts. The non-taxable portion does not.

Do Roth conversions count?

Yes. The amount you convert is taxable income that year, so it raises your MAGI and can affect your IRMAA two years later.

Does tax-exempt (municipal bond) interest count?

Yes. MAGI for IRMAA adds tax-exempt interest back to your AGI, so municipal bond interest still counts.

Do Roth withdrawals count?

No. Qualified withdrawals from a Roth account are tax-free and are not part of your AGI or MAGI.

Does selling my home affect IRMAA?

It can. Any taxable capital gain above the home-sale exclusion is in your AGI and can raise your MAGI for that year.

What Counts as MAGI for IRMAA?

What MAGI means for IRMAA

For IRMAA, MAGI is a short formula: your adjusted gross income plus any tax-exempt interest you earned. Adjusted gross income (AGI) is your total income after a handful of adjustments, and you can find it on the first page of your federal tax return. Tax-exempt interest is income that is not taxed at the federal level, most often interest from municipal bonds.

Here is the part that trips people up: MAGI for IRMAA is not a single line on your tax return. There is no box labeled MAGI. You work it out by taking your AGI and adding your tax-exempt interest back in. Both of those figures are on your return, so the math is simple, but you do have to do it yourself.

This is the number that matters. Every IRMAA bracket is measured against your MAGI. If your MAGI lands above a threshold, even by a little, a surcharge is added to your premiums for the whole year. Knowing what goes into MAGI is the first step to seeing where you stand.

Income that counts

Most of the income you think of as income flows into your AGI, so it counts toward your MAGI. That includes:

Wages and salary from a job.
Withdrawals from Traditional IRA, 401(k), and 403(b) accounts. The money was never taxed going in, so it is taxed coming out.
Required minimum distributions (RMDs), the amounts you must withdraw from those accounts once you reach the required age.
The taxable amount of a Roth conversion, which is the pre-tax money you move from a Traditional account into a Roth in a given year.
Capital gains you realize when you sell investments.
Dividends from stocks and funds.
Taxable interest from bank accounts, CDs, and bonds.
Tax-exempt and municipal bond interest. Even though this is not taxed, IRMAA adds it back in, so it still counts.
Pensions and annuity payments.
Rental income and income from a business you run.
The taxable portion of your Social Security benefits. Depending on your other income, part of your benefit may be taxable, and that taxable part counts.

Income that does NOT count

Some money you receive never enters your AGI, so it does not raise your MAGI for IRMAA. That includes:

Qualified Roth withdrawals. You already paid tax on Roth contributions, so qualified withdrawals come out tax-free and stay out of MAGI.
Qualified charitable distribution (QCD) amounts. When you send money directly from your IRA to a charity, that amount is excluded from your AGI.
HSA distributions used for qualified medical expenses, which are tax-free.
A return of your own principal, such as getting back the original money you invested.
Loan proceeds, which are not income.
The principal of gifts and inheritances you receive. The cash itself is not taxable income, though any income those assets later earn can be.

Quick reference

Here is the short version of both lists side by side. Use it as a starting point, then check your own return for the details.

Counts toward MAGI	Does not count
Wages and salary	Qualified Roth withdrawals
Traditional IRA, 401(k), 403(b) withdrawals and RMDs	QCD amounts (excluded from AGI)
Taxable amount of a Roth conversion	HSA distributions for qualified expenses
Capital gains, dividends, taxable interest	Return of your own principal
Tax-exempt and municipal bond interest (added back)	Loan proceeds
Pensions, annuities, rental and business income	Principal of gifts and inheritances
Taxable portion of Social Security	Non-taxable portion of Social Security

The 2-year lookback

Social Security does not use your current income to set IRMAA. It uses the most recent tax return the IRS has on file, which runs two years behind. So your 2026 IRMAA is based on your 2024 MAGI. The income you report today follows you forward.

This is why a single high-income year can matter so much. One large capital gain, a big Roth conversion, or the sale of a property can raise your MAGI for that year and lift your Medicare premium two years later, even if your income has dropped back down by then. To see exactly how the timing works, read how IRMAA is calculated and the IRMAA 2-year lookback explainer.

How to estimate your MAGI

You can get a close estimate in a few minutes. Start with your latest tax return: take your AGI and add your tax-exempt interest. That gives you the MAGI from that year.

Then adjust for anything you know has changed. If you plan a Roth conversion, add the taxable amount. If you sold a home, add any taxable gain above the home-sale exclusion. If you have retired and your wages have stopped, subtract that income. The goal is a realistic picture of the year that will set a future premium.

A few moves can lower the number you land on, such as qualified charitable distributions or careful timing to avoid the IRMAA cliff. Once you have an estimate, compare it to the 2026 IRMAA brackets or run the numbers in the calculator to see your tier.

Common questions

Does capital gains affect IRMAA?: Yes. Realized capital gains are part of your AGI, so they raise your MAGI and can push you into a higher IRMAA tier in the year you realize them.
Is Social Security counted in MAGI for IRMAA?: Only the taxable portion of your Social Security benefits is in your AGI and counts. The non-taxable portion does not.
Do Roth conversions count?: Yes. The amount you convert is taxable income that year, so it raises your MAGI and can affect your IRMAA two years later.
Does tax-exempt (municipal bond) interest count?: Yes. MAGI for IRMAA adds tax-exempt interest back to your AGI, so municipal bond interest still counts.
Do Roth withdrawals count?: No. Qualified withdrawals from a Roth account are tax-free and are not part of your AGI or MAGI.
Does selling my home affect IRMAA?: It can. Any taxable capital gain above the home-sale exclusion is in your AGI and can raise your MAGI for that year.

Source: Social Security defines the MAGI used for IRMAA as your adjusted gross income plus any tax-exempt interest (SSA publication 05-10536); income components per IRS. Informational only, not financial or tax advice. Last verified June 2026.