Why does my household income matter under the Affordable Care Act?
Updated on November 15, 2019
The government utilizes your household’s combined Modified Adjusted Gross Income, or MAGI as a basis to determine your eligibility for a government health insurance subsidy under the Affordable Care Act.
MAGI is typically the same as Adjusted Gross Income (entered on your most recent tax return) and includes: wages, taxable interest and other taxable income, dividends, alimony and unemployment compensation – after deductions are made for some self-employed expenses, student loan interest, tuition, moving expenses, among other things.
For some people, certain amounts may be added to the Adjusted Gross Income to achieve the MAGI, such as certain tax-exempt interest received during the year.
Estimate your Modified Adjusted Gross Income by:
Finding the Adjusted Gross Income listed on your most recent federal tax return and adjusting it based on any changes (additional income or reductions) you expect to see in your income for the current year.
Remember, it’s your household’s projected income for the current year MAGI that determines your eligibility for a subsidy.
A final decision on how much subsidy assistance you may receive in the current year is made only by the government exchange authority in your state.
Note:eHealth is not a law firm or tax advisor and is not providing legal or tax advice regarding Modified Adjusted Gross Income. Consult with your own legal counsel or tax advisor if you have questions regarding the determination of your MAGI.