The Affordable Care Act uses Modified Adjusted Gross Income (MAGI) to determine eligibility for income-based Medicaid and subsidized health insurance through the Marketplaces. MAGI is calculated using a household's Adjusted Gross Income, which includes wages, salaries, tips, taxable interest, pension and annuity distributions, business income, capital gains, unemployment compensation, dividends, alimony, rental real estate, royalties, partnerships, S corporations, trusts, taxable refunds, credits, and offsets of state and local income taxes. Deductions from Adjusted Gross Income include certain self-employed expenses, student loan interest, IRA deductions, moving expenses for military members, penalties on early withdrawal of savings, health savings account deductions, alimony paid under settlements executed before 2019, certain business expenses of reservists, performing artists, and fee-basis government officials, and educator expenses. It is recommended to consult the Health Insurance Marketplace for your state, your local Medicaid agency, or a legal or tax advisor for assistance in determining your MAGI.
