Credit portal




What is my modified adjusted gross income

what is my modified adjusted gross income

What counts as "income" for PPACA subsidies?

What counts as "income" for PPACA subsidies?

Apparently there is a substantial "cliff" for subsidies provided for starting next year as part of PPACA (Obamacare) health insurance exchanges. Below 400% of the poverty rate (

$46K for individual,

$94K for family of 4) premiums of "silver" level plans are capped at 9.5% of income. The subsidies (or not) could be very material for someone planning retirement spending, particularly for early retirees that aren't yet Medicare eligible. Here is one purported calculator: It shows that for a family of 4 with 53-year-old head of household the cliff increases their insurance premium from $8,901 to over twice that at the un-subsidized $18,475. Crossing the cliff takes a single person aged 53 from $4,372

to $7,826 in premium.

My question is: what counts as "income" for calculating eligibility for these subsidies? Presumably withdrawals from ordinary 401Ks or IRAs would do, but withdrawals from Roth plans not? How about dividends from tax-exempt muni bonds? Cap gains offset by cap losses? This must be concisely stated somewhere in terms of the various IRS definitions of income but I couldn't google up anything specific.

I could imagine that depending on the answers that a fair bit of "gaming" to end up with an income below the cliff could end up being commonplace to save $3.5K to $9K.

(no political or sky-is-falling comments please - I'm asking a straightforward question about the law as it stands, and don't want to get this thread locked. Thanks in advance.)

Category: Bank

Similar articles: