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 will be asked about your current monthly income and then about your yearly income.
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.
Types of income to include
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.
Your MAGI is the total of the following for each member of your household who’s required to file a tax return:
- Your on your federal tax return
Your total (or “gross”) income for the tax year, minus certain adjustments you’re allowed to take. Adjustments include deductions for conventional IRA contributions, student loan interest, and more. Adjusted gross income appears on IRS Form 1040, line 11.
Refer to glossary for more details.
- Excluded foreign income
- Nontaxable Social Security benefits (including tier 1 railroad retirement benefits)
- Tax-exempt interest
- MAGI does not include Supplemental Security Income (SSI)
- Your
The chart below shows common types of income and whether they count as part of MAGI. If you expect income types not listed or have additional questions, get details on what counts as income from the IRS.
| 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 coverage, 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 that you get from your state. Visit CareerOneStop's Unemployment Benefits Finder for more information about unemployment in your state. |
| 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 | Don't 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). Don’t include qualified distributions from a designated Roth account. |
| Alimony | Depends | Include: Divorces and separations finalized before January 1, 2019. Don't Include: divorces and separations finalized on or after January 1, 2019. |
| 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 | |
| Gifts | No | |
| Supplemental Security Income (SSI) | No | 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 | |
| Child Tax Credit checks or deposits (from the IRS) | No |
Select a question for more details:
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 have to pay money back when you file your federal tax return.
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