IRMAA Explained: How It Works, 2025–2026 Income Limits, and How to Control It
If you’re on Medicare (or close to it), IRMAA can be one of the most frustrating “surprise” costs in retirement.
IRMAA stands for Income-Related Monthly Adjustment Amount. It’s an income-based surcharge added to your Medicare costs when your income is above certain thresholds. It affects:
Medicare Part B (doctor/outpatient coverage) — added to your monthly Part B premium
Medicare Part D (prescription drug coverage) — added on top of your plan’s Part D premium
The key planning challenge: IRMAA is based on your tax return from two years ago, using a Medicare version of “income” called MAGI.
What Is the American Opportunity Tax Credit (AOTC)?
What Is the American Opportunity Tax Credit (AOTC)?
The AOTC allows eligible taxpayers to claim up to $2,500 per eligible student per year for qualified education expenses during the first four years of postsecondary education.
The credit is partially refundable—up to $1,000 of the credit can be refunded even if the taxpayer owes no tax.
It covers 100% of the first $2,000 of qualified expenses and 25% of the next $2,000.