Modified Adjusted Gross Income (MAGI)

Modified adjusted gross income (MAGI) is the pre-tax income for your entire household that you expect you’ll be claiming on your tax return, minus a few specific deductions. Here are a few essential facts.

What does MAGI have to do with health insurance?

The individual health insurance marketplace uses your modified adjusted gross income to calculate if you qualify for subsidies, or financial assistance, that can make marketplace plans less expensive. It’s also used to figure out whether you qualify for Medicaid.

How is MAGI different from Adjusted Gross Income (AGI)?

Your modified adjusted gross income is different from the adjusted gross income (AGI) you report on your income tax returns because it adds back in a few tax-exempt income sources that aren’t on your AGI. Adding back these income sources gives a better picture of your total yearly earnings, your ability to pay for health insurance, and your need for financial assistance.

How can I calculate my modified adjusted gross income?

Start with the adjusted gross income you reported on your most recent tax return. It's on line 37 of the 1040 form.

Using your AGI, you can then calculate your MAGI by adding back certain deductions, including but not limited to:

• Contributions to specific retirement accounts (like an IRA)
• Student loan interest
• Tuition-related costs and deductions
• Alimony payments
• Rental losses

The number you get as your MAGI should be in between your total income and your AGI. But since most of these deductions are rare, your MAGI is usually pretty close to, if not the same as, your AGI.

To estimate your MAGI, talk to your financial advisor or accountant.