What to include as income
When you fill out a Marketplace application, you’ll need to estimate what your household income is likely to be for the year.
- Marketplace savings are based on your expected household income for the year you want coverage, 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.
- Need help estimating your income? Use this income calculator.
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.
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
- 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.
| Income type | Include as income? | 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 | Include all unemployment compensation, including unemployment compensation as a result of the coronavirus disease 2019 (COVID-19) emergency. Learn more from the U.S. Department of Labor. |
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 | Depends | Divorces and separations finalized before January 1, 2019: Include as income. Divorces and separations finalized on or after January 1, 2019: Don’t include as income. |
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 (untaxed) foreign income | Yes | |
Economic Impact/Stimulus Payments (come from the IRS as a result of the COVID-19 emergency) | No | |
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 |
- Do I need to include income of people in my household who don’t need insurance?
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.
- Do I include my dependents’ income from things like summer jobs, work-study, and limited part-time work?
The Marketplace will count their income 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.
- Can I take any deductions to my income?
The Marketplace allows you to reduce your income with certain deductions. Learn about these deductions and how to report them.
- What if my income is hard to predict (like if I work irregular hours or seasonally)?
Sometimes it can be hard to predict your income, like if you work seasonally, have an irregular work schedule, or recently experienced a job change. For now, report your current income. We’ll show you a yearly estimate. You can report changes to your application as they occur. It’s important to do this right away because your coverage options and savings may change.
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.