Modified Adjusted Gross Income under the Affordable Care Act
Under the Affordable Care Act, eligibility for income-based Medicaid 1 and subsidized health insurance through the Marketplaces is calculated using a household’s Modified Adjusted Gross Income (MAGI). The Affordable Care Act definition of MAGI under the Internal Revenue Code 2 and federal Medicaid regulations 3 is shown below. For most individuals who apply for health coverage under the Affordable Care Act, MAGI is equal to Adjusted Gross Income. This document summarizes relevant federal regulations; it is not personalized tax or legal advice. Consult the Health Insurance Marketplace for your state, your local Medicaid agency, or a legal or tax advisor for assistance in determining your MAGI.
Modified Adjusted Gross Income (MAGI) =
Adjusted Gross Income (AGI)
Line 4 on a Form 1040EZ
Line 21 on a Form 1040A
salaries, tips, etc.
- Taxable interest
- Taxable amount of pension, annuity or IRA distributions and Social Security benefits 4
- Business income, farm income, capital gain, other gains (or loss)
- Unemployment compensation
- Ordinary dividends
- Alimony received
- Rental real estate, royalties, partnerships, S-corporations, trusts, etc.
- Taxable refunds, credits, or offsets of state and local income taxes
- Other income
Note: Check the IRS website for detailed requirements for the income and deduction categories above. Do not include Veterans’ disability payments, workers’ compensation or child support received. Pre-tax contributions, such as those for child care, commuting, employer-sponsored health insurance, flexible spending accounts and retirement plans such as 401(k) and403(b), are not included in AGI but are not listed above because they are already subtracted out of W-2 wages and salaries.Source: laborcenter.berkeley.edu