What income items from a 2024 Form 1040 count toward MAGI for the 2025 premium tax credit?
Executive summary
The premium tax credit (PTC) for 2025 uses the ACA-specific MAGI method: start with adjusted gross income (AGI) from Form 1040 (line 11) and add back a very limited set of untaxed items — non‑taxable Social Security benefits, tax‑exempt interest, and excluded foreign earned/housing income — to arrive at MAGI for subsidy eligibility [1] [2] [3]. Other definitions of MAGI exist for different programs, so the Medicare, IRA, or other MAGI rules do not control Marketplace subsidy calculations [4] [3].
1. Start with AGI on Form 1040 (the base number)
The calculation for the Marketplace premium tax credit begins with the taxpayer’s adjusted gross income — the AGI shown on line 11 of Form 1040 — not gross income or some broader measure; AGI is the baseline that most sources use when explaining MAGI [3] [1]. The agencies and tax guides all emphasize that MAGI for the ACA is a derived figure, not a line printed on the return, so prepare to compute it from line 11 plus the specific add‑backs described below [3] [1].
2. The three add‑backs that change AGI into ACA MAGI
For premium tax credit purposes the law adds back only three categories to AGI: non‑taxable Social Security benefits (generally Form 1040 line 6a minus line 6b), tax‑exempt interest (Form 1040 line 2a), and foreign earned income and housing exclusions you claimed on Form 2555 or amounts excluded because they were received from Puerto Rico or American Samoa — the IRS lists those same add‑backs in its MAGI guidance [2] [1] [5]. Multiple plain‑language guides and federal sites repeat that for many households these additions are zero and MAGI equals AGI, but when taxpayers have these specific untaxed amounts they must be added back for subsidy calculations [1] [2].
3. How that maps to typical Form 1040 items and examples
Practically, a filer should look at line 11 (AGI) and then add: any tax‑exempt interest reported on line 2a (for example, interest from municipal bonds that is excluded from taxable income), any non‑taxable portion of Social Security shown as the difference of 6a and 6b, and any amount excluded under Form 2555 for foreign earned income or housing exclusion — IRS instructions and Healthcare.gov both call these out explicitly [1] [5] [2]. If none of those items appear on the 1040, the MAGI used to determine 2025 Marketplace subsidies is simply the AGI on line 11 [1] [3].
4. Why this definition matters — and how it differs elsewhere
This ACA MAGI is intentionally narrow: other federal programs and tax rules use different MAGI formulas with additional add‑backs or subtractions (for example, ROM definitions tied to IRAs or Medicare surcharges follow different rules), so relying on a generic “MAGI” description can mislead taxpayers about subsidy eligibility [4] [3]. Reporting and advocacy discussions sometimes conflate MAGI concepts across programs; authoritative guidance for the premium tax credit is the statutory formula and Marketplace/IRS instructions that list the three add‑backs — Healthcare.gov and statutory summaries consistently present that limited set [1] [2] [5].
5. Bottom line for a 2024 Form 1040 used to determine 2025 PTC
When using a 2024 Form 1040 to determine MAGI for the 2025 premium tax credit, include AGI (line 11) and add back only non‑taxable Social Security benefits, tax‑exempt interest, and any excluded foreign earned/housing income (or income excluded as Puerto Rico/American Samoa resident) — if none of those apply, MAGI equals the AGI on the return [1] [2] [5]. This is the ACA‑specific MAGI standard that will determine subsidy amounts, and taxpayers should not assume other untaxed or excluded items are automatically added unless those items match the three specified categories in federal guidance [2] [1].