That’s accurate terminologythe calculation is a modification of adjusted gross income.
It’s specific to health insurance and has its own rules.
It’s also used to determine eligibility for CHIP andMedicaid.
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How Does the Calculation Work?
With that in mind, let’s take a look at how ACA-specific MAGI is calculated.
The details regarding premium tax credit reconciliation are explained in theinstructions for Form 8962.
This is true regardless of whether an adjustment to the subsidy amount is necessary on your tax return.
But the higher your MAGI is, the lower your subsidy amount will be.
But contributions to ROTH retirement accounts do not reduce MAGI, as those contributions are not made pre-tax.)
You should consult with a tax professional if you have questions about your specific situation.
This is not the same as MAGI calculations used for other purposes.
For many people, ACA-specific MAGI is the same as the AGI that’s listed on their tax return.
Centers for Medicare and Medicaid Services.MAGI 2.0: Building MAGI knowledge.
Internal Revenue Service.Form 1040.
Congressional Research Service.The use of modified adjusted gross income (MAGI) in federal health programs.
Cornell Law School, Legal Information Institute.42 U.S. Code 1396a.
State plans for medical assistance.
Cornell Law School, Legal Information Institute.42 CFR 435.603 - program of modified adjusted gross income (MAGI).
healthinsurance.org.We claim our son, but not our daughter, on our taxes.
How are premium subsidies calculated for families like ours?
Internal Revenue Service.Questions and answers on the premium tax credit.
Ortaliza, Jared, et al.
December 5, 2024.
Berkeley Labor Center.Modified adjusted gross income under the Affordable Care Act.
