What Is MAGI for Covered California?

MAGI is usually a little different from Adjusted Gross Income.

If you are trying to figure out your Covered California income, the place to start is usually your Adjusted Gross Income (AGI) on Form 1040, Line 11.

Then add back, if applicable:

Tax-exempt interest
Non-taxable Social Security benefits
Excluded foreign income

That is generally how you get from AGI to MAGI for Covered California.

For many people, MAGI is the same as AGI or very close to it. But if you have tax-exempt interest, non-taxable Social Security, or excluded foreign income, your MAGI may be higher than your AGI.

Important: Covered California is usually looking at your estimated income for the upcoming coverage year, not just what appears on last year’s tax return.

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How Do You Calculate MAGI?

Step 1: Start with Form 1040, Line 11 — your Adjusted Gross Income.

Step 2: Add any tax-exempt interest.

Step 3: Add any non-taxable Social Security benefits.

Step 4: Add any excluded foreign income.

That total is generally your MAGI for Covered California.

Quick MAGI Worksheet

AGI (Form 1040, Line 11) __________

Plus tax-exempt interest __________

Plus non-taxable Social Security __________

Plus excluded foreign income __________

= Estimated MAGI for Covered California __________

What Gets Added Back?

Tax-exempt interest
This is interest that may not be taxable for regular income tax purposes, but may still count for MAGI.

Non-taxable Social Security
If part of your Social Security is not taxable, that non-taxable portion may still get added back for MAGI.

Excluded foreign income
If you excluded foreign earned income from taxable income, it may still count for MAGI.

What Does Not Usually Change the Basic Formula?

Do not double count your wages, self-employment income, or taxable Social Security.

Those items are generally already reflected in your Adjusted Gross Income.

Why Last Year’s Tax Return Is Only a Starting Point

Covered California usually wants your best estimate for the upcoming year.

Last year’s tax return can be a helpful starting point, but if your income is changing, your estimate for the coverage year may be different.

If your income changes during the year, report the change promptly so your subsidy does not end up too high or too low.

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Frequently Asked Questions

Is MAGI always different from AGI?
No. For many people, MAGI is the same as AGI or only slightly different.

Where do I start on my tax return?
Start with Form 1040, Line 11, which is your Adjusted Gross Income.

What usually gets added back?
Usually tax-exempt interest, non-taxable Social Security, and excluded foreign income.

Should I use last year’s income or this year’s estimate?
Usually your best estimate for the upcoming coverage year.

What if I am not sure what to include?
That is where I may be able to help.

Need Help Estimating Your MAGI?

If you are not sure what counts and what does not, reach out.

You can email me your basic numbers, or your recent tax return information, and I can help you estimate your Covered California MAGI.

Steve Shorr
Covered California Certified Insurance Agent
Email: [email protected]

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This page is for general educational purposes only and is not tax or legal advice. Final eligibility is determined by official program rules and your application.

Scroll down for a comprehensive list and details of all the ins and outs of the definition of MAGI Income

More information on MAGI Definition

• 1040 IRS Annual Tax Form 
  • Schedule 1  Additional Income & Adjustments to Lower your  MAGI Income
    • IRA Retirement 
    • Health Savings Account 
    • Trumps Big Beautiful Bill – may lower line 6 A  Social Security Income Learn More >>>  Newsweek *  PBS *
  • Estimate next years MAGI Income?
    • Steve’s Video on MAGI Income
  • Get instant quotes, subsidy calculation and coverages
  • NO ASSET TEST for MAGI based subsidies in Covered CA or MAGI Medi Cal Qualification. Steve’s   VIDEO 
    • Nor is there a lien against your estate for Covered CA or MAGI Medi Cal

• Modified Adjusted Gross Income  (MAGI) (2) … means

  adjusted gross income – Line 11 of the 1040 Form *    ^{Health Care.Gov * 26 USC §62 *} 

  *Plus +

  (i) Amounts excluded from gross income under IRC §911 * Foreign Exempted * IRS Form 2555  * CFR   1.36 B – 1 *

  (ii) Tax-exempt interest  ^{[IRS Coursework] [Form 8815 * Interest Income  * Investing Answers.com]}  the taxpayer receives or accrues during the taxable year; and

  (iii) some Social Security Benefits  ^{Western Poverty & Law Explanation of MAGI  ♦  (UC Berkely One Page Summary) ♦   CFR 1.36 B 1  * IRS Publication 974 ♦ George Town.edu}

  Get even more details & definitions of MAGI Income

#Adjustments to Income - Schedule 1

#Schedule1 1040

• Part I Additional Income
  • 2a Alimony received
  • 3 Business income or (loss). Attach Schedule C
  •           Get Health Quote for your business
  • 5 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E
  • 7 Unemployment compensation
  • 8 Other income:
    • a Net operating loss
    • b Gambling income
    • c Cancellation of debt
    • d Foreign earned income exclusion from Form 2555
    • e Taxable Health Savings Account distribution
      • Get an instant quote for qualifying HDHP health insurance plans 
• Part II Adjustments to Income
  • 11 Educator expenses
  • 13 Health savings account deduction. Attach Form 8889
    • Get an instant quote for qualifying HDHP health insurance plans 
  • 15 Deductible part of self-employment tax. Attach Schedule SE
  •         Learn more about your Social Security Benefits
  • 16 Self-employed SEP, SIMPLE, and qualified plans -
    • Learn more and get a plan set up
  • 17 Self-employed health insurance deduction
    • Get Employer Group Quote - must have at least one non spousal employee
  • 19a Alimony paid
  • 20 IRA Individual Retirement Account deduction 
    • Learn more and get a plan set up
  • 21 Student loan interest deduction
• Instant Business Health Insurance Proposals 

Details… of MAGI 

#Household.income means ^{Code of FEDERAL Regulations – IRS Income Taxes – 1.36B 1 – (e) …(1)} … the sum of—

(i) A taxpayer’s modified adjusted gross income; (Line 37 Line 11  1040)  plus 

(ii) The aggregate modified adjusted gross income of all other individuals who—

          (A) Are included in the taxpayer’s family under paragraph (d) [below] of this section; and

          (B) Are required to file a return of tax imposed by section 1 for the taxable year (determined without regard to the exception under section (1)(g)(7) to the requirement to file a return). ^{[26 USC §6012  ♦ IRS tool to see if you must file a return  ♦  Medi-Cal Household Size Flow Chart ♦ Blog – Insure Me Kevin.com] DHCS *} 

(f) Dependent has the same meaning as in section §152.   ^{*  IRS Interactive Assistant *} 

(d) … A taxpayer’s family means the individuals for whom a taxpayer properly claims a deduction for a personal exemption under section 151 for the taxable year.

Family size [Medi-Cal Household Size Flow Chart ♦ Blog – Insure Me Kevin.com] means the number of individuals in the family. Family and family size may include individuals who are not subject to or are exempt from the penalty [mandate] under  §5000 A  (f)  (1) for failing to maintain minimum essential coverage.  ^{Health Care.gov explanation} *

      Count income & household size  Who to include in your household  Tax filer + spouse + tax dependents = household         Healthcare.Gov 

 26 USC § 151 – Allowance of deductions for personal exemptions  pdf

(a) Allowance of deductions
In the case of an individual, the exemptions provided by this section shall be allowed as deductions in computing taxable income.

To be more clear  —  (2) Married taxpayers must file joint return. A taxpayer who is married (within the meaning of section 7703) at the close of the taxable year is an applicable taxpayer only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year. GPO.Gov Final Regulations Page 11   *   Turbo Tax Calculator  *  Tax Policy Center…..  Joint or separate?  * Estranged Spouse?

Premium Tax Credit Form 8962   &    Instructions

Get a Free No Obligation Calculation of your Tax Credit, Premiums and see the benefit brochures.

View other pages & resources in this section…

• Getting MAGI Right – 23 page primer by George Town University on differences that apply to Medicaid (Medi-Cal) and CHIP  Children’s Health Insurance Program    Insure Kids now CA
• Power Point presentation CMS Income Counting MAGI
• InsureMeKevin.com analysis
  • See also this article on Kevin’s site
• If you would like to talk to a professional tax adviser about this try Bruce Bialosky  [email protected]  310.273.8250
• Agent Training – MAGI and APTC PowerPoint Presentation