Get Coverage How to estimate your income

What’s included as income

When you fill out a Marketplace application, you’ll need to estimate what your household income is likely to be for 2017.

  • In most cases you’ll use your gross income — your total income before taxes and other deductions are taken out. But see details in the chart below to be sure.
  • Marketplace savings are based on your expected household income for 2017, not last year’s income. You must make your best estimate so you qualify for the right amount of savings.
  • You may have the option to enter your income as monthly or yearly. You may be asked to confirm a yearly amount if we got the information somewhere else.

Whose income to include in your estimate

For most people, a household consists of the tax filer, their spouse if they have one, and their tax dependents, including those who don’t need coverage.

The Marketplace counts estimated income of all household members who are required to file a tax return.

Learn more about who’s counted in a Marketplace household.

What income is counted

The Marketplace uses an income number called modified adjusted gross income (MAGI) to determine eligibility for savings. It’s not a line on your tax return.

See what’s included in MAGI and how to estimate it.

Your MAGI is the total of the following for each member of your household who’s required to file a tax return:

  • Your Adjusted Gross Income (AGI) on your federal tax return
  • Excluded foreign income
  • Nontaxable Social Security benefits (including tier 1 railroad retirement benefits)
  • Tax-exempt interest received or accrued during the tax year
  • MAGI does not include Supplemental Security Income (SSI)

See how to make an estimate of your MAGI based on your Adjusted Gross Income.

The chart below shows common types of income and whether they count as part of MAGI. If you expect income types not shown or have additional questions, see details on what the IRS counts as income.

Types of income to include in your estimate

Income type Include Notes
Federal Taxable Wages (from your job) Yes If your pay stub lists “federal taxable wages,” use that. If not, use “gross income” and subtract the amounts your employer takes out of your pay for child care, health insurance, and retirement plans.
Tips Yes
Self-employment income Yes Include “net self-employment income” you expect — what you’ll make from your business minus business expenses. Note: You’ll be asked to describe the type of work you do. If you have farming or fishing income, enter it as either “farming or fishing” income or “self-employment,” but not both.
Unemployment compensation Yes
Social Security Yes Include both taxable and non-taxable Social Security income. Enter the full amount before any deductions.
Social Security Disability Income (SSDI) Yes But do not include Supplemental Security Income (SSI).
Retirement or pension Income Yes Include most IRA and 401k withdrawals. (See details on retirement income in the instructions for IRS publication 1040). Note: Don’t include qualified distributions from a designated Roth account as income.
Alimony Yes
Child support No
Capital gains Yes
Investment income Yes Include expected interest and dividends earned on investments, including tax-exempt interest.
Rental and royalty income Yes Use net rental and royalty income.
Excluded foreign income Yes
Gifts No
Supplemental Security Income (SSI) No But do include Social Security Disability Income (SSDI).
Veterans’ disability payments No
Worker’s Compensation No
Proceeds from loans (like student loans, home equity loans, or bank loans) No

Common questions

Yes.

Marketplace savings are based on total household income, not the income of only household members 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 can state which household members need coverage.

The Marketplace will count it only if they're required to file a federal tax return. Learn about filing requirements for dependents from the IRS.

Even if they file a tax return when they don't have to – like to get a tax refund – their income won’t be counted.

The Marketplace allows you to reduce your income with certain deductions. Learn about these deductions and how to report them.

Report income changes to the Marketplace

Once you have Marketplace health insurance, it’s very important to report any income changes as soon as possible.

If you don’t report these changes, you could miss out on savings or wind up having to pay money back when you file your federal tax return for the year.

Learn how to report changes to the Marketplace

 
 

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