IRMAA by State: How Medicare Surcharges Change Your Retirement Budget

Medicare's income-related surcharge, IRMAA, adds up to $487.00 per month to your Part B premium in 2026, on top of the standard $202.90. Your state of residence doesn't change the federal bracket thresholds, but it absolutely changes how much income you have that counts toward them.

What the 2026 IRMAA Brackets Actually Look Like

For 2026, IRMAA kicks in at $109,000 MAGI for single filers and $218,000 for married filing jointly. There are five surcharge tiers above those thresholds.

| MAGI (Single) | MAGI (Joint) | Part B Monthly Premium | Part D Surcharge | |---|---|---|---| | Up to $109,000 | Up to $218,000 | $202.90 (standard) | $0 | | $109,001 to $136,000 | $218,001 to $272,000 | $284.10 | $14.50 | | $136,001 to $163,000 | $272,001 to $326,000 | $365.30 | $37.60 | | $163,001 to $192,000 | $326,001 to $384,000 | $446.50 | $61.10 | | $192,001 to $500,000 | $384,001 to $750,000 | $527.50 | $84.60 | | Above $500,000 | Above $750,000 | $608.90 | $91.00 |

These figures use your MAGI from two years prior. Your 2026 Medicare costs are based on your 2024 tax return. That two-year lag creates real planning opportunities, and real traps.

Why Your State Changes the Calculation

Federal MAGI includes Social Security benefits, IRA distributions, capital gains, and pension income. What your state taxes, or doesn't tax, doesn't directly reduce federal MAGI. But it affects the retirement income strategy you can realistically run.

Consider two retirees with identical federal MAGI of $130,000. One lives in Florida, which has no state income tax. The other lives in California, where that income faces rates up to 9.3%. The Californian pays an extra $6,000 to $8,000 in state taxes on top of IRMAA surcharges, compounding the drag on retirement cash flow.

States that tax Social Security benefits create a separate problem. A retiree in Minnesota or Vermont who pulls $40,000 from Social Security faces state tax on a meaningful portion of that, plus it flows directly into the federal MAGI calculation that triggers IRMAA. States like Florida, Texas, and Nevada, which tax neither Social Security nor income broadly, give retirees more room to control what reaches the federal threshold. See our full breakdown of states that don't tax Social Security for a state-by-state comparison.

Capital gains are the other major lever. In high-income retirement years, required minimum distributions combined with capital gains can spike MAGI well past the first IRMAA bracket. States with high capital gains taxes, California taxes them as ordinary income at rates up to 13.3%, stack punishment on top of the federal IRMAA hit. States with lower or zero capital gains taxes let retirees realize gains more freely without the same MAGI blowback. Our capital gains tax by state breakdown covers exactly how wide that spread is.

Strategies to Stay Below the Threshold

The single most effective move is Roth conversion before age 63. Since IRMAA looks back two years, income you convert at 61 or 62 affects your Medicare costs at 63 and 64. Converting in a low-income year, before Social Security and RMDs begin, reduces future taxable distributions without triggering IRMAA.

Healthcare sharing accounts and municipal bond interest also matter. Municipal bond interest is excluded from federal MAGI, which makes it one of the cleaner sources of retirement income for IRMAA purposes. Retirees in high-tax states get a double benefit here: municipal bonds from their home state are often also exempt from state income tax.

If you've had a major income event like a one-time business sale or Roth conversion that spiked your MAGI in a prior year, you can file Form SSA-44 to request an IRMAA reduction based on a life-changing event. Divorce, retirement, and loss of income all qualify. The Social Security Administration accepts these appeals, and the approval rate for well-documented cases is high.

State of domicile matters most when it changes. Retirees who move from California or New York to a zero-income-tax state mid-retirement can dramatically reduce the income flows that feed into MAGI in future years. Our best states for retirees to avoid taxes ranks where that move makes the biggest difference. You can also run personalized scenarios at our state comparison calculator.

Key Takeaways

• The 2026 IRMAA threshold is $109,000 MAGI for singles and $218,000 for married filers. Surcharges range from $81.20 to $405.90 per month above the standard Part B premium.
• Your state doesn't change the federal IRMAA brackets, but state income tax, Social Security taxation, and capital gains treatment directly affect how much income flows into your MAGI.
• Roth conversions before age 63 and relocation to a zero-income-tax state are the two highest-impact moves for controlling long-term IRMAA exposure.

Compare how your current state stacks up against retirement-friendly alternatives at liveordiehere.com.