Is Sale of Rental Properties included in MAGI Calculation and its impact on The Affordable Care Act Health Insurance Subsidy

[Daisy1301]

I own 10 investment/rental properties that are all paid off and I am retired.   I am  55 and currently qualify for the Affordable Care Act Subsidy for Health Insurance which has been great and allowed me to retire early.  My plan is to sell one rental property a year over the next 10 years and at 65 I can go on Medicare. 

Will selling rental properties increase my MAGI which will impact my subsidy amount for the Affordable Care Act?  

[MinhT1]

Yes.

If you sell your investment/rental properties at a profit, the capital gains are included as income for the determination of your premium credit.

Please read this document from Healcare.gov for more information.

Please note that the premium credit is reduced to 0 when your income exceeds 400% of the Federal poverty levels.

However  for tax years 2021 and 2022, the American Rescue Plan of 2021 (ARPA) temporarily expanded eligibility for the premium tax credit by eliminating the rule that a taxpayer is not allowed a premium tax credit if his or her households income is above 400% of the Federal Poverty Line.

@Daisy1301  I have edited my answer.

[Edited 02/08/22  |  7:30AM PST]

[Daisy1301]

Thanks for the information MinhT1.  However, this is where I get confused because I am currently getting a premium tax credit and my income is above the 400% poverty line without selling any rental properties.  Also on the IRS website it states this:

"2021 and 2022 Premium Tax Credit Eligibility. For tax years 2021 and 2022, the American Rescue Plan...

"2021 and 2022 PTC Eligibility. For tax years 2021 and 2022, the American Rescue Plan Act of 2021 (ARPA) temporarily expanded eligibility for the premium tax credit by eliminating the rule that a taxpayer with household income above 400% of the federal poverty line cannot qualify for a premium tax credit."

[MinhT1]

@Daisy1301

You are correct.

I had overlooked the temporary provisions of ARPA 2021 for 2021 and 2022. I have edited my previous answer.