QUESTION

What income is counted in determining my eligibility for premium tax credits?

Individuals with no coverage | Eligibility for Premium Tax Credits and Cost-Sharing Reductions
ANSWER

Eligibility for premium tax credits is based on your expected household income for the year in which you are applying for coverage. For example, if you are applying for coverage to start in January 2021, you should estimate your projected income for 2022.

The Marketplace assesses your Modified Adjusted Gross Income, or MAGI, to determine your eligibility for premium tax credits. When you file a federal income tax return, you must report your adjusted gross income (which includes wages and salaries, interest and dividends, unemployment benefits, and several other sources of income). MAGI modifies your adjusted gross income by adding to it any non-taxable Social Security benefits you receive, any tax-exempt interest you earn, and any foreign income you earned that was excluded from your income for tax purposes.

To learn more about what details to include in your household income estimate, see HealthCare.gov’s table on what to include in your income estimate.

Note that eligibility for Medicaid and CHIP is also based on MAGI, although some additional modifications may be made in determining eligibility for these programs. Contact your marketplace or your state Medicaid program for more information. (26 C.F.R. § 1.36B-1; IRS, Questions and Answers on the Premium Tax Credit).

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