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What income types were added to MAGI calculations in the 2025 rule change?
Executive summary
Available sources do not present a single, authoritative list titled “2025 rule change that added income types to MAGI”; instead, reporting and guidance through 2025 describe which items are commonly added back into MAGI (untaxed foreign income, tax‑exempt interest, and non‑taxable Social Security benefits) and note that MAGI definitions vary by program (Marketplace/Medicaid, IRS forms, Medicare) [1] [2]. Health‑policy analysis also highlights that some items previously counted under state Medicaid rules—child support, veterans’ benefits, workers’ comp, gifts/inheritances, TANF and SSI—were removed under MAGI methodology [3].
1. What “MAGI” means now — one formula, many uses
The HealthCare.gov glossary and federal guidance define MAGI for Marketplace, Medicaid and CHIP as AGI plus specific add‑backs: untaxed foreign income, non‑taxable Social Security benefits, and tax‑exempt interest; however, MAGI can be calculated differently depending on the program or tax provision [1] [2]. That means “what counts” depends on the benefit being tested — e.g., premium tax credits, Medicaid eligibility, Medicare IRMAA, and IRA phase‑outs each use MAGI concepts but may have different add‑backs in practice [2] [1].
2. Common income types explicitly listed as MAGI add‑backs
Multiple guidance sources list the same core add‑backs: untaxed foreign earned income and housing exclusions, tax‑exempt interest, and non‑taxable Social Security. HealthCare.gov specifically lists untaxed foreign income, non‑taxable Social Security benefits, and tax‑exempt interest as items to add to AGI when determining MAGI for Marketplace and Medicaid uses [1]. The IRS pages discussing MAGI also point to foreign earned income and housing exclusions among the items added back for certain tax computations [2].
3. Changes in Medicaid income treatment noted by analysts
Policy analysis after MAGI adoption (and its 2025-era descriptions) stresses a substantive shift: some income categories that state Medicaid rules formerly counted are not included under the MAGI methodology — examples cited include child support received, veterans’ benefits, workers’ compensation, gifts and inheritances, TANF, and SSI [3]. That’s not an “addition” to MAGI but rather a removal compared with older Medicaid income counting rules; analysts flagged this as a key reason MAGI can reduce counted income for benefit eligibility compared with prior state practices [3].
4. Reporting that refers to “2025 updates” and expanded MAGI role
Several tax and financial outlets in 2025 described MAGI’s growing importance for eligibility and noted new or expanded program linkages — for example, more deductions, credits, and surcharges tie into MAGI calculations in 2025 — but these writeups summarize impacts rather than a single administrative rule that added discrete income types [4] [5]. Fidelity, NerdWallet, H&R Block and similar explain which items to add back for typical MAGI calculations but do not present a single new statutory list called out as the “2025 rule change” [6] [7] [8] [5].
5. What the authoritative sources (IRS, HealthCare.gov) actually say about add‑backs
For taxpayers and program eligibility, HealthCare.gov lists the principal add‑backs for MAGI as untaxed foreign income, non‑taxable Social Security benefits, and tax‑exempt interest [1]. IRS guidance likewise references foreign earned income and housing exclusions among items to add back in specific MAGI calculations and points readers to particular forms and instructions for program‑specific thresholds [2]. These are the clearest, repeatedly cited items in the provided materials [1] [2].
6. What is not found or remains unclear in current reporting
The provided sources do not include a single federal “2025 rule change” document enumerating newly added income types to MAGI as an explicit regulatory change; nor do they list a definitive expansion that added categories like SSDI/SSI or other specific items as new MAGI components in a single rule. If you’re asking about a particular agency’s 2025 regulation (IRS, CMS, or HHS) that purportedly added income types, available sources do not mention that exact rule language or a one‑line change labeled “2025 rule change” adding new MAGI income types (not found in current reporting) [2] [3].
7. Practical takeaway and next steps for verification
If you need a definitive, program‑specific list (e.g., for Medicaid eligibility vs. Roth IRA limits vs. Medicare IRMAA), consult HealthCare.gov and the IRS pages for each program because MAGI formulas differ and the authoritative lists are program guidance and form instructions [1] [2]. For state Medicaid specifics, review state manuals (analysts note which items were excluded under MAGI vs. older rules) and any 2025 state policy updates cited by your state Medicaid agency [3] [9].