The Marketplace uses an income number called modified adjusted gross income (MAGI) to determine eligibility for savings. It’s not a line on your tax return.
See what’s included in MAGI and how to estimate it.
Your MAGI is the total of the following for each member of your household who’s required to file a tax return:
Your total (or “gross”) income for the tax year, minus certain adjustments you’re allowed to take. Adjustments include deductions for conventional IRA contributions, student loan interest, and more. Adjusted gross income appears on IRS Form 1040, line 11.
Refer to glossary for more details.
on your federal tax return
Excluded foreign income
Nontaxable Social Security benefits (including tier 1 railroad retirement benefits)
MAGI does not include Supplemental Security Income (SSI)
If your pay stub lists “federal taxable wages,” use that. If not, use “gross income” and subtract the amounts your employer takes out of your pay for child care, health insurance, and retirement plans.
Include “net self-employment income” you expect — what you’ll make from your business minus business expenses. Note: You’ll be asked to describe the type of work you do. If you have farming or fishing income, enter it as either “farming or fishing” income or “self-employment,” but not both.
Include both taxable and non-taxable Social Security income. Enter the full amount before any deductions.
Social Security Disability Income (SSDI)
But do not include Supplemental Security Income (SSI).
Retirement or pension Income
Include most IRA and 401k withdrawals. (See details on retirement income in the instructions for IRS publication 1040). Note: Don’t include qualified distributions from a designated Roth account as income.
Divorces and separations finalized before January 1, 2019: Include as income. Divorces and separations finalized on or after January 1, 2019: Don’t include as income.
Include expected interest and dividends earned on investments, including tax-exempt interest.
Rental and royalty income
Use net rental and royalty income.
Excluded (untaxed) foreign income
Supplemental Security Income (SSI)
But do include Social Security Disability Income (SSDI).
Veterans’ disability payments
Proceeds from loans (like student loans, home equity loans, or bank loans)
Child Tax Credit checks or deposits (from the IRS)
Marketplace savings are based on total household income, not the income of only household members who need insurance.
If anyone in your household has coverage through a job-based plan, a plan they bought themselves, a public program like Medicaid, CHIP, or Medicare, or another source, include them and their income on your application.
When you apply you can state which household members need coverage.
The Marketplace will count their income only if they're
The minimum income requiring a dependent to file a federal tax return. 2022 filing requirements for dependents under 65: Earned income of at least $12,950, or unearned income (like from investments or trusts) of at least $1,150. You must include on your Marketplace application income for any dependent required to file.
Even if they file a tax return when they don't have to – like to get a tax refund – their income won’t be counted.
The Marketplace allows you to reduce your income with certain deductions. Learn about these deductions and how to report them.
Sometimes it can be hard to predict your income, like if you work seasonally, have an irregular work schedule, or recently experienced a job change. For now, report your current income. We’ll show you a yearly estimate. You can report changes to your application as they occur. It’s important to do this right away because your coverage options and savings may change.
Report income changes to the Marketplace
Once you have Marketplace health insurance, it’s very important to report any income changes as soon as possible.
If you don’t report these changes, you could miss out on savings or wind up having to pay money back when you file your federal tax return for the year.