IRMAA tier 3 (2026): income thresholds and cost
By Mario Bailey · Published · Last reviewed
Tier 3 thresholds and surcharges
| Filing status | MAGI from | MAGI up to | Monthly surcharge / person | Annual surcharge / person |
|---|---|---|---|---|
| Single / HoH | $171,000 | $205,000 | $385.00 | $4,620.00 |
| Married filing jointly | $342,000 | $410,000 | $385.00 | $4,620.00 |
Surcharges are per enrolled Medicare beneficiary and apply to both Part B and Part D (the Part D figure is the surcharge on top of your plan premium). All premiums are based on your MAGI from two years prior.
Crossing into tier 3
Tier 3 is a cliff threshold: one dollar of MAGI above $171,000 (single) or $342,000 (MFJ) triggers the full tier-3 surcharge, not a proportional amount. The step up from the previous tier costs $144.60/month per person ($1,735.20/year). Because IRMAA uses a two-year lookback, the income that lands you in this tier was earned two years before the premiums hit.
The tier 3 cliff as a tax rate
Because the step is all-or-nothing, the cost of crossing depends on how far you cross. The table divides one premium year of the tier-3 step ($1,735.20 for one enrollee, $3,470.40 for a married couple with both enrolled) by the MAGI above the threshold. A conversion that overshoots by $1,000 pays the step at an effective 174% on those dollars (single), on top of income tax.
| MAGI over the tier 3 threshold | Effective rate, single | Effective rate, couple (both enrolled) |
|---|---|---|
| $1,000 | 174% | 347% |
| $5,000 | 35% | 69% |
| $10,000 | 17% | 35% |
| $25,000 | 6.9% | 14% |
Filling all of tier 3 ($34,000 wide for single filers, $68,000 for joint) spreads the same step over the whole width: 5.1% single, 5.1% for a couple. The rule that falls out: stop under the threshold, or cross it by enough to dilute the step without reaching the next one. Small overshoots are the expensive case.
Headroom before tier 3
Headroom is the gap between a starting MAGI and the tier-3 threshold. A conversion smaller than the room keeps MAGI below the cliff; a conversion larger than the room crosses it.
| Starting MAGI | Room before tier 3 (single) | Room before tier 3 (MFJ) |
|---|---|---|
| $80,000 | $91,000 | $262,000 |
| $120,000 | $51,000 | $222,000 |
| $180,000 | $0 | $162,000 |
| $250,000 | $0 | $92,000 |
Escape hatches
- Convert before age 63. The two-year lookback means MAGI at 63 sets premiums at 65, your first year of Medicare eligibility. Completing large conversions in the pre-63 window keeps them outside the lookback for year one.
- Appeal with SSA-44 after a qualifying life-changing event. Marriage, divorce, death of a spouse, and certain income reductions allow SSA to recalculate using more recent income data. How form SSA-44 works. A Roth conversion is not a qualifying event; that surcharge cannot be appealed.
- One bad year costs one year of surcharge. IRMAA is reassessed annually. Paying tier 3 for one premium year can still be worth it if the conversion saves more in lifetime tax than the surcharge costs. The calculator computes this comparison.