What income sources are included in ACA MAGI?

1. How MAGI is defined for ACA subsidies — the short version

For Marketplace premium tax credit and most MAGI-based rules, the Marketplace uses your AGI plus certain untaxed items — specifically untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest — to arrive at MAGI ^[1]. Practical calculator tools and KFF’s Marketplace guidance instruct applicants to report wages, interest, dividends, Social Security and “certain other income sources” when estimating MAGI ^{[3] [2]}.

2. What income types are explicitly included

Reporting guidance and explainers repeatedly list wages and salary, interest and dividends, capital gains, foreign income, and Social Security as counted toward MAGI used for ACA subsidy eligibility ^{[2] [3] [5]}. That means most earned and unearned income that appears on a tax return (ordinary income, capital gains, taxable Social Security when applicable) will increase your ACA MAGI and affect subsidy amounts ^{[3] [5]}.

3. What’s added back to AGI that surprises people

MAGI is not just AGI — it specifically adds back certain untaxed items. The federal Marketplace definition names three common add‑backs: untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest (for example, from some municipal bonds) ^[1]. Other explainers note that tax-exempt investment income and exempt-interest dividends can be included in MAGI even if they aren’t federally taxable ^[4].

4. What is commonly excluded from the MAGI calculation

KFF’s materials and the Marketplace calculator say the MAGI calculation does not include gifts, inheritances, Supplemental Security Income (SSI), and some other non-taxable items — meaning those receipts normally won’t count toward ACA subsidy eligibility ^[3]. HealthReform Beyond the Basics also flags that Medicaid may treat some lump-sum income differently and that certain American Indian and Alaska Native income is excluded for Medicaid’s MAGI calculations ^[4].

5. Why the precise MAGI rules matter for planning

Because subsidies and eligibility hinge on an annual MAGI estimate, capital gains and other intermittent income can push you into a different subsidy bracket; planners therefore suggest timing asset sales or using pre-tax accounts (traditional IRA, HSA) to lower AGI and MAGI ^{[5] [6]}. HealthInsurance.org and other calculators emphasize that subsidy calculations use your expected MAGI for the coverage year and that policy changes (temporary enhancements) can alter who qualifies ^[6].

6. Differences across programs and limited exceptions

Be cautious: “MAGI” is a term used across programs but defined slightly differently in different contexts. For Marketplace subsidies the add‑backs are those listed on HealthCare.gov; other programs (e.g., some Medicaid rules, IRMAA for Medicare) may use different MAGI formulations or timing rules ^{[1] [7]}. HealthReform notes specific program exceptions — for example, Medicaid’s treatment of lump-sum income and tribal income exclusions — that can lead to different outcomes than Marketplace calculations ^[4].

7. Practical takeaways and next steps

When estimating ACA MAGI for Marketplace enrollment, start with your expected AGI and add untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest ^[1]. Include wages, interest, dividends, capital gains and similar income in your estimate ^{[2] [3] [5]}. If you have unusual sources (lump sums, tribal income, tax-exempt interest), consult the Marketplace tool or state Medicaid guidance because those sources can be treated differently across programs ^{[3] [4]}.

Limitations: Available sources describe what is typically included and excluded and note program-specific exceptions, but they do not provide an exhaustive line‑by‑line list of every income type or cover every edge case—so if you have complex or one-time income, use HealthCare.gov’s eligibility tool or seek tax/benefits advice ^{[3] [1]}.