For IRMAA, Medicare generally uses modified adjusted gross income from your tax return. A practical way to think about it is AGI + tax-exempt interest.
Short answer: Medicare MAGI is not simply taxable income after deductions. It usually starts with adjusted gross income, then adds tax-exempt interest such as municipal bond interest.
Medicare modified adjusted gross income formula
The common IRMAA formula is:
Medicare MAGI = Adjusted gross income + tax-exempt interest
Your adjusted gross income comes from your federal tax return. Tax-exempt interest is added back because IRMAA uses a Medicare-specific income measure, not just taxable income.
Income that can count
- Wages, pension income, interest, dividends, and taxable Social Security benefits.
- Traditional IRA and 401(k) withdrawals, including RMDs.
- Roth conversions, taxable capital gains, and taxable home sale gains.
- Tax-exempt interest, including municipal bond interest.
In-content sponsor space for a Medicare education checklist or annual IRMAA update.
Income-count questions
Does Social Security count toward IRMAA?
The taxable portion of Social Security benefits can be part of AGI, so it can be part of Medicare MAGI. The non-taxable portion is generally not added separately for IRMAA.
Do capital gains count for IRMAA?
Taxable capital gains generally count because they are included in AGI. A stock sale, fund distribution, or taxable home sale gain may raise Medicare MAGI for the income year used by IRMAA.
Do RMDs or 401(k) withdrawals count for IRMAA?
Taxable retirement distributions generally count because they flow into AGI. Use the RMD IRMAA calculator or the 401(k) withdrawal Medicare premium calculator before taking a large distribution.
Do qualified Roth IRA withdrawals count for IRMAA?
Qualified Roth IRA withdrawals usually do not raise Medicare MAGI because they are not taxable income. Roth conversions are different: a conversion is usually taxable and can raise MAGI.
Does tax-exempt interest count for IRMAA?
Yes. Tax-exempt interest, including municipal bond interest, is commonly added back when Medicare calculates MAGI for IRMAA. See the municipal bond interest and IRMAA guide for the Form 1040 lines and example.
Do both spouses pay IRMAA from one joint MAGI number?
If both spouses are on Medicare, a married-filing-jointly MAGI number can lead to a surcharge for each enrolled spouse. The spouse IRMAA guide explains when the monthly impact can apply to one person or both.
Do HSA distributions count for IRMAA?
HSA distributions used for qualified medical expenses are generally not taxable and usually do not raise AGI. Non-qualified distributions can be taxable and may affect MAGI.
Why this matters before a big income decision
A Roth conversion, RMD, IRA withdrawal, capital gain, or home sale gain can look manageable for income tax purposes but still move you into a higher Medicare premium bracket. Use the calculator before the income event when you still have time to adjust the plan.
Review the 2026 IRMAA brackets or estimate your possible Medicare surcharge.