Get Coverage How to estimate your income

How to estimate your expected 2017 income

When you fill out a health insurance application and use some tools on this website, you’ll need to estimate your expected income for 2017. Two important things to know:

  • Marketplace savings are based on your expected household income for 2017, not last year’s income.
  • Income is counted for you, your spouse if married, and everyone you’ll claim as a tax dependent on your 2016 federal tax return who’s required to file a tax return. Include their income even if they don’t need health coverage. See details on who to include in your household.

How to make an estimate of your expected 2017 income

Step 1. Start with your household’s adjusted gross income (AGI) from your most recent federal income tax return.

Where to find AGI on IRS tax forms:

  • Form 1040: Line 37
  • Form 1040 EZ: Line 4
  • Form 1040 A: Line 21

Don’t have recent AGI? See another way to estimate your income.

Step 2. Add the following kinds of income, if you have any, to your AGI:

  • Tax-exempt foreign income
  • Tax-exempt Social Security benefits (including tier 1 railroad retirement benefits)
  • Tax-exempt interest

Don’t include Supplemental Security Income (SSI).

Step 3. Adjust your estimate for any changes you expect for 2017.

Consider things like these for all members of your household:

  • Expected raises
  • New jobs or other employment changes, including changes to work schedule or self-employment income
  • Changes to income from other sources, like Social Security, alimony, or investments
  • Changes in your household, like gaining or losing dependents. Gaining or losing a dependent can have a big impact on your savings.

Now you have an estimate of your expected income for 2017. Use this figure when asked to estimate your expected income for 2016.

More details on reporting income and household members

Estimating unpredictable income

It’s hard to predict your income if you’re unemployed, self-employed, on commission, or on a work schedule that changes regularly.

If your income for 2017 is hard to predict, base your estimate on your past experience, recent trends, what you know about possible changes at your workplace, and similar information. If the job is new to you, ask people in the same field or in the same company about their experiences.

Just do your best to make a realistic estimate for 2017 — and be prepared to update it when it changes.

Learn more about how to estimate your expected income if you’re:

Make your best estimate and update when things change

After finding out your final income when you file your 2017 tax return, you’ll compare (or "reconcile") any difference between the premium tax credit you used to reduce your monthly costs during the year and what you actually qualify for based on your final 2017 income.

  • If your final 2017 income is higher than your estimate: You probably used more tax credits than you qualified for. You’ll have to pay back the difference with your 2017 tax return.
  • If your final 2016 income is lower than your estimate: You probably used less tax credits than you qualified for. You’ll get the difference back when you file your 2017 tax return.

You can reduce the chance of a big tax bill (or big refund of money you could have used all year) by updating your application as soon as your income changes.

IMPORTANT - Update your Marketplace application as soon as possible when your income or household members change during the year. Learn how to update your information during the year.

More answers: Income and household size

If the Marketplace tells you to provide pay stubs, self-employment records, or other information to verify your income, follow these directions to upload documents.

The Heath Insurance Marketplace uses an income figure called Modified Adjusted Gross Income (MAGI) to determine the programs and savings you qualify for. For most people, it’s identical or very close to Adjusted Gross Income (AGI). MAGI is not a line on your federal tax return.

The estimate instructions above are based on MAGI, but it’s not a term you need to know in order to apply or use tools on this site.

Start with “federal taxable wages” for each income earner in your household.

  • You should find this amount on your pay stub.
  • If it's not on your pay stub, use gross income before taxes. Then subtract any money the employer takes out for health coverage, child care, or retirement savings.
  • Multiply federal taxable wages by the number of paychecks you expect in 2016 to estimate your income for the year.
  • See what other household income sources to include.
  • Adjust all income amounts for expected changes during the year.

Marketplace savings are based on income for all household members, not just the ones who need insurance.

If anyone in your household has coverage through a job-based plan, a plan they bought themselves, a public program like Medicaid, CHIP, or Medicare, or another source, include them and their income on your application.

When you apply you’ll say which household members need coverage.

Report income and household changes on your Marketplace insurance application as soon as possible. If you don’t, you could wind up with the wrong amount of savings or even the wrong insurance plan. Learn how to update your income during the year.

There are some differences, depending on your state and other factors. The Marketplace application may ask you specific questions to see if you’re eligible for Medicaid. If it looks like anyone in your household qualifies for Medicaid or the Children’s Health Insurance Program (CHIP), we’ll send your application to your state agency. They may ask you for more information. If it turns out you’re eligible, they’ll help you enroll.

 
 

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