Which specific income sources are newly included or excluded under the updated MAGI rules?

1. What MAGI now explicitly adds to AGI: tax items that previously could be “invisible”

MAGI starts with AGI and then requires you to add back particular items that are not taxable — specifically tax‑exempt interest, non‑taxable (or nonincluded) Social Security benefits, and foreign income that was excluded under tax rules — so these sources can raise MAGI even when they don’t increase taxable income on a return ^{[1] [2] [7]}.

2. The familiar income types carried forward via AGI

Income that flows into AGI — wages and tips, business income, pensions and annuities, unemployment benefits, alimony received (where applicable), dividends, taxable interest, rents and royalties, capital gains, and similar ordinary sources — remain counted for MAGI because they are part of AGI ^{[3] [8]}. In practice, for most households MAGI will be close to or the same as AGI unless one of the added non‑taxed categories applies ^[9].

3. What MAGI excludes across federal guidance: built‑in exemptions

Certain payments are generally excluded from MAGI under federal and state materials. Examples invoked across the materials include Supplemental Security Income (SSI) and many American Indian and Alaska Native (AI/AN) income sources (for instance, distributions from federal trust lands or similar tribal payments) — these remain excluded and should not be counted in MAGI ^{[4] [5] [6]}.

4. State guidance highlights additional, conditional exclusions

State manuals show that some payments are excluded in routine cases but can become countable under conditions. Missouri’s guidance notes Adoption Subsidy/Assistance Payments are excluded unless they exceed the family’s cost to support the adopted child (in which case the excess may be taxable and counted); some crowdfunding and disability payment examples illustrate that whether a payment is included can depend on taxability and who paid premiums for a disability plan ^{[4] [10]}.

5. Lump sums and timing: counted differently than ongoing income

Federal analyses and state guidance emphasize that lump‑sum income is typically only counted in the month it’s received for Medicaid eligibility, not spread across months — an important practical effect for applicants whose eligibility can hinge on short‑term spikes ^[6]. This timing rule can mean the same dollar amount affects MAGI eligibility differently depending on when it was received.

6. How MAGI changes eligibility compared with pre‑MAGI rules

Adoption of MAGI created a uniform federal framework for most nonelderly, nondisabled groups: some items counted under prior state Medicaid rules (or previously excluded) may now be counted because they flow through AGI or are explicitly added back, while some state‑specific exclusions remain for special populations ^{[6] [11]}. This change can make some people ineligible who previously qualified under older state counting rules, and conversely can lower income for others when household composition rules differ ^[6].

7. Practical takeaways for applicants and caseworkers

To estimate MAGI, start with AGI on the tax return and add any tax‑exempt interest, excluded foreign earned income, and non‑taxed Social Security benefits; include all ordinary income that appears in AGI ^{[1] [2]}. But also check program guidance for specific exclusions — SSI, many AI/AN payments, and some assistance/subsidy payments — and watch for conditional rules (e.g., adoption subsidy excesses, employer‑paid disability premiums) that can flip an item from excluded to included ^{[4] [10]}.

Limitations and unresolved items: available sources do not mention whether any recent administrative rulemaking after 2025 has added new income categories to MAGI or changed the conditional exceptions described above; readers should consult up‑to‑date CMS, IRS, and state Medicaid guidance for the latest decisions (not found in current reporting).