Medicare Sets Your 2027 Premium From Your 2025 Tax Return. Retired Since Then, Sold a Business, or Lost a Spouse? Form SSA-44 Wipes the IRMAA Surcharge, and Most Retirees Pay It Instead
Medicare can price your 2027 premium off a year when you earned far more than you do now, and most retirees absorb that surcharge without realizing a federal form exists to fight it.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Social Security sends a letter: your Medicare premium is going up, sometimes by hundreds of dollars monthly, because of income you may no longer have.
Medicare bases each year’s premium on your tax return from two years earlier, so your 2027 bill comes from your 2025 return. If you retired, sold a business, or lost a spouse since then, that return no longer reflects your life. Form SSA-44 lets you tell Social Security to erase the surcharge. The form is optional; the agency acts only when a beneficiary must request, either verbally or in writing a new look. Retirees who don’t ask keep paying.
Why a 2025 Tax Return Sets Your 2027 Medicare Bill
The surcharge is IRMAA, the income-related monthly adjustment amount. It comes from Section 1839(i) and 1860D-13(i) of the Social Security Act, covering Part B and Part D drug coverage. The detailed rules sit in federal regulations at 20 CFR 418.
Social Security counts on IRS data, which is generally from two years prior to the year for which the premium is being determined. So 2026 premiums are generally based on 2024 tax return information, and 2027 premiums run off 2025 returns.
The income measure is modified adjusted gross income, or MAGI. It equals your AGI from line 11 of Form 1040 plus tax-exempt interest from line 2a. That second piece catches municipal bond investors off guard: interest free from federal tax under Internal Revenue Code (IRC) Section 103 still counts toward IRMAA. Capital gains, IRA withdrawals, Roth conversions, and the taxable share of Social Security all land in AGI, too.
One Business Sale Can Add $12,710 to a Couple’s Medicare Bill
IRMAA tiers are cliffs: go $1 over a threshold and you pay that tier’s premium for the whole year. In 2026, the standard Part B premium is $202.90 monthly. Joint filers start paying the surcharge when MAGI passes $218,000; single filers when it passes $109,000.
| 2026 joint MAGI (from 2024 return) | Part B per person, monthly | Part D surcharge, monthly |
|---|---|---|
| Up to $218,000 | $202.90 | $0 |
| $218,001 to $274,000 | $284.10 | $14.50 |
| $274,001 to $342,000 | $405.80 | $37.50 |
| $342,001 to $410,000 | $527.50 | $60.40 |
| $410,001 to $749,999 | $649.20 | $83.30 |
| $750,000 or more | $689.90 | $91.00 |
Take a hypothetical married couple, both on Medicare, who sold their small business in 2025. The gain raises their joint MAGI to $420,000. On the 2026 table, each spouse would pay $649.20 a month for Part B instead of $202.90, plus $83.30 a month for Part D.
That works out to $446.30 a month in extra Part B premium per person. For both spouses over a full year, the Part B surcharge comes to $10,711.20, and adding Part D brings the total to $12,710.40. Even a dollar over the first line costs each spouse an extra $974.40 a year.
The 2027 levels will adjust for inflation. CMS published 2026 figures on November 14, 2025.
Which Life Changes Qualify for Form SSA-44, and Which Don’t
Social Security accepts eight life-changing events: death of spouse, marriage, divorce or annulment, work reduction, work stoppage, loss of income-producing property, loss of employer pension income, or receipt of an employer payment.
Retirement counts as work stoppage. A widow whose income fell after her husband died qualifies and should act fast: once she files as single, the surcharge threshold drops to $109,000 from the joint $218,000.
A business sale is harder. A voluntary sale and a one-time capital gain are non-qualifying events. But an owner who sells the company and stops working has a work stoppage, and that qualifies. Social Security says it does not develop the types of income that make up the MAGI. It only checks that the event happened and that MAGI dropped afterward.
How to File SSA-44 Before You Overpay All Year
- File after the drop. You can ask any time after an LCE and a significant reduction in MAGI has occurred.
- Estimate the new year. Provide an estimated 2027 MAGI and optionally a 2028 estimate.
- Attach proof. A death certificate, employer letter, or closing documents. You sign under penalty of perjury.
- Send the return later. Social Security processes your estimate first, then requests a signed copy once filed.
Timing is critical. A new determination usually takes effect in January of the filing year, but Social Security ordinarily won’t reach back into an earlier premium year. Exception: the event occurred in that year’s last three months and your request gets in by March 31. A 2026 retiree who waits until 2028 to file loses all 2027 surcharge recovery.
The most common mistake is planning around a spike that doesn’t qualify. A Roth conversion or large stock sale can’t trigger SSA-44 relief. Plan ahead with a CPA before the deal closes, for example by structuring a business sale over multiple years (IRMAA is one of several surcharges and coverage gaps we mapped in a free Medicare guide).
Contact [email protected] for any questions or corrections.
Vilma Rios is a tax professional and tax content contributor with more than 15 years of experience in tax and accounting. She specializes in federal tax research, tax education, and translating complex tax rules into clear, practical information for individuals, families, and small-business owners.
Vilma is a Content Tax Contributor II with the National Association of Tax Professionals (NATP), where she contributes to tax education and professional content. She has also presented tax information through webinars, including Spanish-language tax education, and has appeared on Telemundo 47 discussing tax topics and helping viewers understand important tax-filing requirements.
Her experience also includes tax and accounting work, tax research, IRS-related matters, and public tax education. While in college, Vilma volunteered in an IRS-sponsored tax assistance program and was recognized for her community service by local and state officials.
Known as “Your Tax Geek,” Vilma is passionate about making taxes easier to understand and helping people navigate an increasingly complex tax system.
