Hi Richard,
Marketplace insurance eligibility and subsidies are based on your expected household income for the year you want coverage – not the previous year’s income.
The Marketplace uses a number called "modified adjusted gross income (MAGI)" to determine if you qualify for savings. MAGI starts with the AGI on your tax return and adds in certain untaxed income, such as untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest. MAGI does not include Supplemental Security Income (SSI).
For many people, MAGI is the same as (or very close to ) their adjusted gross income shown on the tax return. You should include income for both you and your wife when calculating MAGI. If you had any tax dependents, you would include their income also.
Regarding specific actions that create taxable income, each of the situations you mentioned would increase your MAGI.
You didn’t mention which state you live in, but subsidies are based on your income compared to the Federal poverty level (FPL), which varies by state. I suggest you check on the Marketplace website to see if you qualify for coverage and subsidies.
Thanks for participating in today's Ask The Expert event!
Kimberly, CPA for over 30 years
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