Inherited IRA Tax Calculator (2026)

The other calculators on this site answer when to take distributions. This one answers how much it costs. Enter your income situation and a proposed distribution amount — the calculator estimates the federal income tax attributable to that distribution and flags two effects most beneficiaries underestimate: the Social Security provisional income multiplier and potential Medicare IRMAA surcharges.

Why inherited IRA distributions can cost more than your marginal rate

The Social Security provisional income multiplier

Federal law (IRC § 86) taxes a portion of Social Security benefits as ordinary income based on your provisional income — defined as MAGI plus half of your SS benefit.² The thresholds are fixed (not inflation-adjusted) and were set decades ago, meaning most SS recipients are in the taxable zone.

When you take a distribution from an inherited traditional IRA, that distribution increases your provisional income dollar-for-dollar. If you're already in the 85% taxation zone — provisional income above $34,000 single or $44,000 MFJ — each additional $1 of inherited IRA income can make $0.85 of your SS benefits taxable. At a 22% marginal rate, that multiplier raises your effective rate on the distribution to:

22% × 1.85 = 40.7% effective marginal rate

This is the compounding effect that makes distribution timing so valuable for retirees receiving Social Security. See the full explanation: Inherited IRA and Social Security Benefit Taxation →

IRMAA — Medicare premium surcharges

Medicare Part B and Part D premiums are income-tested through the IRMAA system. If your modified adjusted gross income (MAGI) exceeds $109,000 (single) or $218,000 (MFJ) in 2026, your 2028 Medicare premiums will be higher — by $202–$974/month depending on how far above the threshold you land.³

The IRMAA thresholds are cliff-based, not graduated: crossing from $109,000 to $109,001 triggers the first surcharge tier on every dollar of Part B premium. A $60,000 inherited IRA distribution can push someone from below to above the threshold — triggering an IRMAA bill for 2028 that arrives as a surprise. See: Inherited IRA and Medicare IRMAA →

The calculator flags when your MAGI with this distribution would cross the tier 1 threshold. An advisor can help you plan your annual distribution amounts to stay under the IRMAA thresholds — sometimes the right answer is splitting a $120,000 distribution into two $59,000 distributions across December and January.

What the calculator doesn't include

This is an estimate, not a tax return. Factors not modeled:

• State income taxes — see State Taxes on Inherited IRAs for your state's treatment.
• Alternative Minimum Tax (AMT) — unusual for most inherited IRA situations but possible at higher incomes.
• Tax credits — child tax credit, education credits, and others reduce the tax due but aren't modeled here.
• Deduction phaseouts — certain itemized deductions phase out at higher income levels.
• The § 691(c) IRD deduction — if the decedent's estate paid federal estate tax, you may be entitled to an income tax deduction on each distribution. See the IRD deduction guide.
• After-tax basis — if the inherited IRA contained non-deductible contributions, part of each distribution is tax-free. See Inherited IRA After-Tax Basis.

How to use these numbers

The goal isn't to minimize any single year's tax — it's to minimize total taxes across the entire 10-year SECURE Act window. The optimal distribution amount for any given year depends on:

• Your income trajectory — are you still working, or does income drop at retirement?
• When Social Security claiming starts — claiming earlier means earlier SS + IRA income collision
• IRMAA threshold management across the window
• Roth conversion coordination from your own IRA
• Annual RMD obligations if the original owner was past their Required Beginning Date

See the full distribution strategy analysis: Inherited IRA 10-Year Distribution Strategy →

Sources

1. IRC § 1411(c)(1) — Net Investment Income Tax applies to net investment income, which does not include distributions from IRAs or other qualified retirement plans. IRA distributions are ordinary income, not NIIT-subject investment income.
2. IRS Publication 915 — Social Security and Equivalent Railroad Retirement Benefits. Explains provisional income calculation and taxation thresholds under IRC § 86 ($25K/$34K single; $32K/$44K MFJ). Thresholds are statutory and not inflation-adjusted.
3. Medicare.gov — Part B costs and SSA Publication 05-10536 (IRMAA) — 2026 IRMAA tier thresholds ($109,000/$218,000 first tier). IRMAA uses MAGI from two years prior (2026 distributions affect 2028 premiums).
4. IRS 2026 Tax Inflation Adjustments — 2026 bracket thresholds and standard deduction ($32,200 MFJ / $16,100 single) per IRS Rev. Proc. 2025-32.

2026 federal tax bracket values per IRS Rev. Proc. 2025-32. IRMAA thresholds per CMS/SSA 2026 announcement. SS thresholds are statutory (IRC § 86). Verified June 2026.