What is Modified Adjusted Gross Income (MAGI) for ACA purposes?

1. What MAGI is and why it matters: the narrow technical definition

Under the ACA, MAGI is defined for health‑program eligibility as AGI from your tax return plus three additions when present: untaxed foreign income, non‑taxable Social Security benefits, and tax‑exempt interest; this is the baseline number federal Marketplaces and most Medicaid programs use to judge subsidy and Medicaid eligibility ^{[1] [2] [3]}.

2. How it’s calculated in practice: start with Form 1040 AGI

Practically, you begin with the AGI line on Form 1040 and then add back the three categories above. Many people will find their MAGI identical or very close to AGI, but if you received sizable non‑taxed Social Security benefits (or untaxed foreign income or tax‑exempt interest), your MAGI can be much higher than AGI and change your subsidy outcomes ^{[1] [4] [5]}.

3. Who’s included in the household and whose income counts

MAGI for ACA rules is calculated across your “tax household” — the combined income of everyone whose income is reported on your tax return. That can include dependents who must file their own return; for example, a working child required to file contributes their MAGI to the household total ^{[6] [4] [7]}.

4. Which benefits are counted — and which are excluded

Non‑taxable Social Security benefits (including SSDI) are included in ACA MAGI, but Supplemental Security Income (SSI) is explicitly excluded. Tax‑exempt interest (often municipal bond interest) and untaxed foreign earned income and housing amounts are also counted ^{[8] [3] [1]}. If you rely on other public benefits, note that sources differ on inclusion; the UC Berkeley brief and HealthCare.gov emphasize the three specific add‑backs as the determinative items ^{[3] [1]}.

5. Policy effects: why small additions can change eligibility

Because premium tax credits and cost‑sharing reductions phase by household MAGI relative to Federal Poverty Level (FPL) thresholds, adding non‑taxed Social Security or tax‑exempt interest can push households across subsidy thresholds. For Medicaid in Medicaid expansion states, adults under 65 are eligible if household MAGI is at or below about 138% of FPL, so accurate MAGI matters for program access ^{[7] [4] [6]}.

6. Variations, limits, and exceptions to watch for

Some Medicaid eligibility pathways (for seniors, people qualifying based on disability, or programs not operating under MAGI rules) continue to use older income rules and do not rely on ACA MAGI — the MAGI method applies to most families but not universally ^{[7] [3]}. Also, MAGI calculations used for other tax purposes (e.g., IRA or Roth limits, IRMAA) may differ; ACA uses its specific MAGI definition (p1_s3; ^[9] not provided in depth here).

7. Practical steps and where to get help

To estimate ACA MAGI, pull your AGI from Form 1040 and add any untaxed foreign income, non‑taxable Social Security benefits, and tax‑exempt interest; Marketplace calculators and state resources (or a tax adviser) can help if you have unusual income sources or dependents with filing requirements ^{[5] [1] [6]}. UC Berkeley’s brief and HealthCare.gov are recommended concise references for common COVID‑era questions and the formal definition ^{[3] [1]}.

Limitations and final note: Available sources here detail the ACA‑specific MAGI components and household rules but do not provide exhaustive answers for every special circumstance (for example, some pandemic‑era income treatments are discussed in UC Berkeley materials); consult a tax professional or your state Marketplace for complex cases ^{[3] [6]}.