ACA What is included as income

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 may have the option to enter your income as monthly or yearly. You may be asked to confirm a yearly amount if we got the information somewhere else.

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 who are required to file a tax return.

Learn more about who’s counted in a Marketplace household.

What income is counted

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.See what’s included in MAGI and how to estimate it.

The chart below shows common types of income and whether they count as part of MAGI. If you expect income types not shown or have additional questions, see details on what the IRS counts as income.

Income typeInclude as income?Notes
Federal Taxable Wages (from your job)YesIf 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 insurance, and retirement plans.
Self-employment incomeYesInclude “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 compensationYes
Social SecurityYesInclude both taxable and non-taxable Social Security income. Enter the full amount before any deductions.
Social Security Disability Income (SSDI)YesBut do not include Supplemental Security Income (SSI).
Retirement or pension IncomeYesInclude most IRA and 401k withdrawals. (See details on retirement income in the instructions for IRS publication 1040). Note:Don’t include qualified distributions from a designated Roth account as income.
Child supportNo
Capital gainsYes
Investment incomeYesInclude expected interest and dividends earned on investments, including tax-exempt interest.
Rental and royalty incomeYesUse net rental and royalty income.
Excluded (untaxed) foreign incomeYes
Supplemental Security Income (SSI)NoBut do include Social Security Disability Income (SSDI).
Veterans’ disability paymentsNo
Worker’s CompensationNo
Proceeds from loans (like student loans, home equity loans, or bank loans)No

Do I need to include income of people in my household who don’t need insurance?Do I include my dependents’ income from things like summer jobs, work-study, and limited part-time work?Can I take any deductions to my income?

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 wind up having to pay money back when you file your federal tax return for the year.

Learn how to report changes to the Marketplace.

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