Which Tax Year's Income Counts for IRMAA When You First Enroll in Medicare?
Which tax year's income counts for IRMAA when you first enroll in Medicare? The tax return from two years before your coverage year. Enroll in Medicare in 2026, and the income that sets your premium is your modified adjusted gross income from your 2024 tax return. The rule is the same one that governs every year on Medicare; the first year just has two quirks that catch people off guard.
The fallback quirk
The first quirk is the fallback. Social Security determines IRMAA in the fourth quarter of the year before your coverage year, using the most recent tax return the IRS has on file. Most of the time that is the two-year-old return.
But if you have not filed it yet when the determination runs, Social Security uses the older one.
Enroll for 2026 without your 2024 return on file, and your premium is set by your 2023 return. If you are doing this math in October, you are right on time to make sure the correct return is the one on file.
Run the check: our IRMAA calculator estimates your surcharge from your MAGI, so you can see what each candidate tax year would cost you before the determination runs.
The calendar quirk
The second quirk is the calendar. The month you enroll does not change which tax year counts. Start Medicare in January 2026 or in July 2026 when you turn 65 mid-year: either way, the 2024 return is the one that matters. People sometimes assume a mid-year start means a mid-year lookback. It does not.
One tax year governs the whole coverage year.
The retiree's first-year ambush
Then there is the ambush, which is really the reason this question gets asked. Retire at the end of 2025 and enroll in Medicare for 2026, and your first-year premium is set by your 2024 return, a year you spent working full-time. The surcharge can feel like a billing error. It is not. The system is doing exactly what it was told to do. The general mechanics are in the two-year lookback, explained.
If the drop in income came from retiring or cutting back work, you have a real remedy: Form SSA-44. Work stoppage and work reduction are qualifying life-changing events, and a successful appeal resets your premium to reflect your current, lower income. File it after you receive the IRMAA determination notice, with documentation of the retirement. I covered the filing mechanics in the SSA-44 appeal guide.
One thing the appeal does not cover: a one-time income spike by itself. A large Roth conversion or a one-time 401(k) withdrawal in the lookback year, without a qualifying life-changing event, is not grounds for SSA-44. See how Roth conversions trigger IRMAA before you schedule one.
And there is a piece of good news people miss: the following year corrects itself. Your 2027 premiums will be based on your 2025 return automatically. If your income dropped in 2025, the surcharge falls off on its own, no form required. How long IRMAA lasts covers the year-by-year mechanics.
Plan two years ahead, always
A final practical note for the planning-minded. The decisions you make at 63 and 64 set your first-year Medicare premium. A Roth conversion at 64 shows up in your age-66 premiums. That two-year echo is worth building into any conversion schedule, and the Roth cliff planner on our calculator exists for exactly that calculation.
And one caution on the numbers side: verify the current IRMAA thresholds from Social Security or CMS before you plan around them. The brackets are inflation-adjusted every year, and a stale threshold is worse than no threshold. This guide deliberately quotes none.
Frequently Asked Questions
Which tax year's income counts for IRMAA when I first enroll in Medicare?
The tax return from two years before your coverage year. Enroll in Medicare in 2026, and your modified adjusted gross income from your 2024 tax return sets your premium. The enrollment month does not change which tax year counts.
What if I have not filed that year's tax return yet when IRMAA is determined?
Social Security uses the most recent return the IRS has on file. Enroll for 2026 without your 2024 return filed, and your premium is set by your 2023 return instead.
Does enrolling in Medicare mid-year change which tax year IRMAA uses?
No. Start Medicare in January or in July when you turn 65 mid-year: either way, the two-year-old return governs the whole coverage year. One tax year, one determination, for the full year.
I retired and my income dropped. Can I appeal first-year IRMAA?
Yes, if the drop came from retiring or reducing work. File Form SSA-44 after receiving the IRMAA determination notice, with documentation of the work stoppage or reduction. A one-time income spike alone, without a qualifying life-changing event, does not qualify for an appeal.
Will my second year on Medicare use a newer tax return?
Yes. Each coverage year's premiums use the return from two years before that year. Your 2027 premiums will be based on your 2025 return automatically. If your income dropped in 2025, the surcharge falls off on its own with no form required.