What income and household information do I provide when I apply for Marketplace coverage?
If you want to find out if you qualify for lower costs on Marketplace coverage, you’ll need to provide information about your household members and income.
The Marketplace application includes detailed instructions. It makes calculations using the information you provide to determine whether you’re eligible for lower costs.
The information on this page can help you prepare before you apply.
Important. Marketplace Open Enrollment ended March 31. You can still buy a Marketplace health plan only if you qualify for a special enrollment period. You can apply for Medicaid and CHIP any time. Learn about special enrollment periods and other coverage options after Open Enrollment. Open Enrollment for 2015 coverage starts November 15, 2014.
Reporting on your household
When filling out your application, do include:
- Your spouse
- Your children who live with you, even if they make enough money to file a tax return themselves
- Your unmarried partner who needs health coverage
- Anyone you include on your tax return as a dependent, even if they don’t live with you
- Anyone else under 21 who you take care of and lives with you
When filling out your application, don't include:
- Your unmarried partner who doesn’t need health coverage and is not your dependent
- Your unmarried partner’s children, if they are not your dependents
- Your parents who live with you, but file their own tax return and are not your dependents
- Other relatives who file their own tax return and are not your dependents
To learn about who qualifies as a dependent, refer to IRS Publication 501.
Estimating your income
When you apply for lower costs in the Marketplace, you’ll need to estimate your income for 2014.
You can start by adding up the following items for:
- You and your spouse, if you are married and will file a joint tax return
- Any dependents who make enough money to be required to file a tax return
For each of the following sources, estimate what your income will be in 2014:
- Net income from any self-employment or business (generally the amount of money you take in from your business minus your business expenses)
- Unemployment compensation
- Social Security payments, including disability payments -- but not Supplemental Security Income (SSI)
Other items to include when estimating your 2014 income are: retirement income, investment income, pension income, rental income, and other taxable income such as prizes, awards, and gambling winnings.
Don't include the following:
- Child support
- Supplemental Security Income (SSI)
- Veterans’ disability payments
- Workers’ compensation
- Proceeds from loans (like student loans, home equity loans, or bank loans)
For more information on reporting your income, see IRS Publication 525.
Modified adjusted gross income and household income
When you fill out the Marketplace application, your estimated household income will be calculated using the information you provide. Your household income determines your eligibility for lower costs on Marketplace coverage.
Your household income is your modified adjusted gross income (MAGI) (joint MAGI if you’re married), plus the MAGI of your dependents who make enough money to have to file a tax return.
MAGI is generally your adjusted gross income plus any tax-exempt Social Security benefits (except for Supplemental Security Income (SSI), which is not counted), tax-exempt interest, and tax-exempt foreign income.
You don’t have to figure out your household income or MAGI yourself when you fill out your application. It will be done for you with the income information you include on the application.
More Answers: Reporting on your Household and Income
What if one of my dependents is a full-time student?
If you can claim your child or another person as a dependent on your tax return, include the person as part of your household in your Marketplace application. It doesn’t matter whether he or she is a full-time student. Also include anyone who is under 21 and lives with you, whether or not you claim them on your tax return
What if my spouse and I file taxes separately?
If you’re married, you must file a joint tax return for 2014 in order to get lower costs on Marketplace coverage based on your income in 2014. You file your 2014 taxes in April of 2015.
What if I’m a dependent on someone else’s tax return but want to learn if I qualify for lower costs on Marketplace coverage?
Only the person claiming you as a dependent can qualify for lower costs for your Marketplace coverage.
If I’m divorced and my spouse and I have shared custody, who claims our dependents for the purposes of the Marketplace?
Include the dependent in the tax household of the tax filer who will be claiming the child for the year.
Do I have to report my 2013 income too?
Yes. When you apply you’ll need to tell us your household income for 2013 and also estimate the amount for 2014, taking into account changes you expect.
If I make withdrawals from my IRA or 401k, does this count as income?
It depends on the kind of account you’re withdrawing from. Generally, the amount of your income from a retirement account distribution depends on the type of retirement account, how much you contributed to it, and whether you were already taxed on the amount you contributed.
Withdrawals from a traditional IRA or SEP-IRA generally count as income. (If you made only tax-deductible contributions, all of it is considered income. If you made non-deductible contributions, see IRS Form 8606.)
Roth IRAs are different. Qualified withdrawals from a Roth IRA are not considered income. For more information, see IRS Publication 590.
Withdrawals from a 401k plan are generally counted as income (your pre-tax contributions, an employer’s matching contributions, as well as earnings, are included in income). But qualified distributions from a designated Roth account in a 401(k) plan are not considered income. For more information, see IRS publication 575.
What if I don’t plan on filing a tax return in 2014?
In order to qualify for lower costs on monthly premiums for health insurance based on your income in 2014, you MUST file a tax return for 2014, regardless of your income or other circumstances. This is the return you’ll file in 2015.
What if my income turns out to be different from what I estimate?
When you apply for coverage in the Marketplace, it's important to double-check the information you put on your application. If the amount of expected income you report isn’t accurate, you may not get the right amount of premium tax credit.
If you wind up making more money than you estimated on your application, you could have to pay back some or all of the premium tax credit you’ve received. You would make this payment with your next tax return.
If you wind up making less money than you estimated on your application, you could qualify for a higher tax credit. You would get this money refunded on your next tax return.
During the year, it’s important to report changes in your income or household size to the Marketplace as soon as possible. You can adjust your tax credit so you don’t wind up owing money or getting a big refund on your next tax return.
Learn more about the premium tax credit from the Internal Revenue Service.