The IRMAA 2-Year Lookback, Explained

Why Medicare uses a two-year-old return

When Medicare sets premiums for an upcoming year, your most recent return often has not been filed yet, and even once filed, the IRS needs time to process it. The return from two years before the premium year is the most recent one Social Security can reliably pull from the IRS, so that is the income IRMAA is built on.

Which income year sets which premium

The pattern is simple once you see it: subtract two from the premium year to find the income year.

Source: official 2026 CMS/SSA figures (CMS Medicare costs; SSA Pub. 05-10536). Last verified June 2026.

What this means for recent retirees

The lookback hits new retirees hardest. If you stopped working in 2025, your 2025 income may be a fraction of what it was in 2023, but your 2025 premium is still based on that high 2023 income, and your 2026 premium still leans on 2024. In other words, you can spend your first year or two of retirement paying a surcharge on income you no longer earn.

A worked timeline

Say you earned $250,000 in 2023, then retired at the end of 2024 with a 2025 income of just $60,000:

• 2025 premium: based on 2023 income ($250,000) → a high IRMAA tier, even though you are now retired.
• 2026 premium: based on 2024 income, still elevated if 2024 included a final big earning year.
• 2027 premium: based on 2025 income ($60,000) → likely no IRMAA at all, as the lower income finally flows through.

How to fix it

You have two main levers:

• Appeal after a life event. If a qualifying event such as work stoppage, retirement, divorce, or the death of a spouse cut your income, you can ask Social Security to use newer figures by filing Form SSA-44. See how to appeal IRMAA.
• Plan ahead. If you are simply close to a bracket, timing moves can keep your MAGI under the next threshold. See how to avoid the IRMAA cliff.

Common questions

Why does Medicare use a 2-year-old tax return?

When premiums for a year are set, your most recent year's return has not been filed or processed yet. The return from two years earlier is the most recent one the IRS can reliably provide to Social Security, so that is what IRMAA uses.

What income year is used for 2026 IRMAA?

Your 2026 IRMAA is based on your 2024 income. For 2027 it is your 2025 income, and for 2028 it is your 2026 income.

I just retired: can I lower my IRMAA?

Possibly. If a qualifying life-changing event such as work stoppage reduced your income, you can ask Social Security to use more recent figures by filing Form SSA-44. See the appeal page.

Does IRMAA update once my newer return is processed?

Yes. IRMAA is recalculated each year, so as newer returns reflect a lower income, your surcharge can drop or disappear in a later year even without an appeal.