— 53 Comments ↓

What is the “bottom Line” on the income number MAGI


that one should put down for Covered CA Income?

 

Modified Adjusted Gross Income  (MAGI) (2) … means adjusted gross income – Line 37* & 7 for earlier years or 8b of the new 2019 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 (Line 8b – 2a) [IRS Coursework] [Form 8815 * Interest Income  * Investing Answers.com]  the taxpayer receives or accrues during the taxable year; and

(iii) some Social Security Benefits  (Line 20a & b – 5 a & b) Western Poverty & Law Explanation of MAGI  ♦  (UC Berkely One Page Summary) ♦   CFR 1.36 B 1  * IRS Publication 974 ♦ George Town.edu

Steve Explains MAGI Income

steve explains magi income video

Get Quotes & Enroll

​2019 1040 Form   

Line 8b Adjusted Gross income then add line 2a, 5a &

7a (Foreign Income)

to get Covered CA MAGI Income

 

2019 Schedule 1  Additional Income & Adjustments to Income

Appoint us as your agent - no extra charge
Instant Quotes & Subsidy Calculation for Health Insurance
Set up Phone, Skype or Zoom meeting with screen sharing

IMPORTANT!!! 

The time frame is the future for what you tell Covered CA!

Sure, many people think it’s the past as Covered CA may ask for last years paperwork, but that’s BS!  You might have to give back all the subsidies when you file Subsidy Reconciliation form #8962!

Adjustments to Income – Schedule 1

schedule 1 of 1040

Foreign Earned Income # 2555

IRS Website Explanation of

Foreign Earned Income Instructions for # 2555

& Exclusion

foreign earned income form # 2555

Official Publications on MAGI

It’s important to read the all material & links as one can’t rely on Covered CA to give you the correct answer.

UC Berkeley explains MAGI Modified Adjusted Gross Income –

Click on image to enlarge and for a more clear picture

UC Berkeley explains MAGI Modified Adjusted Gross Income

 

Western Poverty & Law Explanation of MAGI – IMHO one of the most authoritative publications I’ve ever seen!

Instant Quotes & Subsidy Calculation for Health Insurance

Covered CA’s

What Counts for MAGI Income

Covered CA Countable Sources of Income

Cares Act Relief $600/week unemployment – $1,200 Stimulus  FAQ’s 

Get more detail on how each type of income counts under the IRS code for MAGI Income.  

See our child &  subpages for MAGI Income 

Form 8962 Premium Tax Credit
Reconciliation Form attaches to 1040
Subsidy is IMHO hocus pocus - smoke & mirrors
it all comes out when you file taxes!

8962 Subsidy Reconciliation

Our webpage on Form 8962 - Premium Tax Credit Subsidy Reconciliation

Instructions 8962

How to fill out 8962 VIDEO

8962 ONLINE Calculator
TaxFormCalculator.com

etax.com

Details…

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 NEW Line 7  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]

(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 * 

 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.

(b) Taxpayer and spouse
An exemption of the exemption amount for the taxpayer; and an additional exemption of the exemption amount for the spouse of the taxpayer if a joint return is not made by the taxpayer and his spouse, and if the spouse, for the calendar year in which the taxable year of the taxpayer begins, has no gross income and is not the dependent of another taxpayer.

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?

(c) Additional exemption for dependents
An exemption of the exemption amount for each individual who is a dependent (as defined in section 152) of the taxpayer for the taxable year.

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 GeorgeTown 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

Health Care.Gov – What income to count

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

Anchors

 Advocates Guide to MAGI

Advocates Guide to MAGI Income

Report changes as they happen - within 30 days!
Visit our webpage on how to report changes 

report changes as they happen

Covered CA's Webpage on Reporting Changes 

IRS VIDEO on Life Changes

IRS Video on life changes

 

IRS Publication 974 

Premium Tax Credit
IRS Publication 974

VIDEO What is APTC Advance Premium Tax Credit 

 

aptc interactive assistant

Interactive Tax Assistant (ITA)

Am I eligible to claim the Premium Tax Credit? 

IRS FAQ on Premium Tax Credit

 

Tax Estimators

 

 

ACA What You Need To Know  #5187 ACA What you need to know # 5187

Health Net VIDEO
How to get subsidies – pay less for coverage 

 
 
Kaiser Foundation reports that 27% of uninsured individuals are eligible to purchase a bronze plan with $0 premiums after subsidies in 2019.  Silver plans with cost-sharing reductions (CSR) for single individuals with incomes below 200% of the poverty level can be purchased for roughly $20 to $130 per month after subsidies, depending on an enrollees’ income. KFF *

How do the types of Income Below, count for MAGI Income?

Child, Related Pages & Site Map 

53 comments on “MAGI – Modified Adjusted Gross Income – Line 37* Now 7 or 8b”

  1. My husband is losing his (relatively well paid) job this week, and I earn around 10 to $20k per year.

    I am worried about health care coverage, since we will not have any and I am pregnant, and we already have 2 very young children

    We have a ton of $$$ in various bank account savings — does this count against us for Medi-Cal or Covered California coverage?

    Please advise, thank you!

    Worried Pregnant Mom

    Reply

  2. My spouse lost his job and our health benefits due to Covid-19.

    I applied for Covered CA and it asks for the adjusted gross income also it asks for

    itemized deductions we have not asked you about…I called Covered CA and a non-reassuring man told me my

    mortgage real estate/property taxes from Schedule A, line 5B and mortgage interest on line 8A would qualify as itemized deductions. Line 8A also consists of property held for investment.

    Our actual itemized deduction was the standard 24,400. However, I added $11,296 for just line 5B and 8A from schedule A.

    Is it true that these are itemized deductions that I can enter onto the Covered CA application?

    Thank you

    Reply

  3. This is a comment from a “culled” webpage.

    What happens if I overstated my income.

    I’m self employed and my month to month income is not consistent.

    I’ve been covered with a PPO using APTC Advance Premium Tax Credit – subsidy for 2014-16.

    The first two years I made less than $5K and in 2016 I had no income at all. I’ve been borrowing to pay premiums.

    Each year I’ve “projected” approx $18K income partially to prevent falling into the Medi-Cal zone and I also naturally expected to do much better financially.

    CoveredCA has extended my coverage but they need to see evidence by March when checking with the IRS that all years have been filed. I’m just now filing my returns.

    Will I be able to keep my PPO the APTC for this year (2017) and how will the IRS and CoveredCA interpret all this?

    Reply
    Reply

  4. I retired from my company on Jan 1, 2020. I have received a severance pay which will end shortly.

    I also enrolled in [Federal] COBRA until June, 2021. https://employers.healthreformquotes.com/cobra/cal-cobra/

    I plan to enroll in ACA after COBRA ends.

    Starting November of this year, I will have very low income.

    MAGI uses the tax return from previous year (2020) which is way over 600% of Federal Poverty Level $76k for a single
    https://individuals.healthreformquotes.com/covered-ca-tax-credits-subsidies-aptc/magi/income-chart/ but does not reflect next year income which is very low.

    How do I modify MAGI form to reflect actual 2021 income?

    Reply

  5. I lost my job due to COVID 19, I reported that to Covered CA and I was transferred to Medi-Cal.

    I don’t really want to be on Medi-Cal.

    I have a new job starting in June.

    What about the $600/week from the Feds? Does that count as Income for Covered CA? Medi-Cal? I reported the $600 but I heard from Covered CA that that income doesn’t count toward MAGI.

    How much $$$ does one need to earn, to qualify for Covered CA rather than Medi-Cal?

    Reply

    • Here’s the income chart for Medi-Cal vs Covered CA and Enhanced Silver Levels

      So, for a single, as of March 2020 it would be around $18k. Please use an accurate estimate and be sure to update any changes within 30 days. 10 days for Medi Cal.

      Reply

    • We have a VERY confusing situation here on the $600/week PUC Pandemic Unemployment Compensation!

      4. Will the extra $600 per week Pandemic Unemployment Compensation (PUC) payments be considered countable income for purposes of determining eligibility for financial help and premium assistance available through Covered California?

      Yes, all unemployment benefits (including the extra $600 per week PUC payment) are included in the recipient’s income for purposes of eligibility for financial help available through Covered California (APTC, CSR, and state subsidy).

      5. Will the extra $600 per week Pandemic Unemployment Compensation (PUC) payments be considered countable income for purposes of determining Medi-Cal and CHIP eligibility?

      No, the extra weekly $600 PUC payments are not included in the recipient’s income for purposes of eligibility determination for Medi-Cal and CHIP (C-CHIP and MCAP). However, traditional ununemployment benefits are still considered income for Medi-Cal and CHIP purposes. source

      Reply

    • So, what do you expect your Annual MAGI income to be for 2020?

      PUC counts for Covered CA.

      How much will you be making at your new job?

      How much PUC will you get?

      How much did you earn on your old job?

      Please let us enter the numbers for you, AFTER you provide them in WRITING!

      Covered CA’s income, expense & deduction questions are very confusing!

      Reply

  6. My divorce agreement provides that my X Spouse must provide lifetime housing in one of their rental units or bedroom. More specifically – My ex-wife is providing me one room for my living space which values around $450 per month. She also allows me to use her car. Does that count as alimony even though it’s non cash? Does that count as income for Covered CA subsidies?

    *****************
    Our Reply

    In the example on page 14 of IRS Publication 504 https://www.irs.gov/pub/irs-pdf/p504.pdf it says that it wouldn’t be alimony as it’s a home you own and the debts are yours. If you owned the home jointly with your spouse see page 15 table 4

    ****************

    More clarification
    Publication 504 is a 30 page document and refers one to other documents, including your actual separation agreement. Be sure to seek competent tax and legal counsel. Covered CA basically just goes by the definition of MAGI line 37 of your 1040 and not how your AGI is calculated.

    Reply

  8. I do not have a line 37 on my 1040 – however I do have a Schedule A (Agriculture business) amount on my line 8 that is subtracted from my line 7 (gross income) to get My line 10 taxable income – from which 12% is calculated and became the amount I paid in taxes.

    Do I use my taxable income for 2018?

    Reply

  9. Hi,

    My mom has been told that she is no longer eligible for Medi-Cal because of her Alimony. She’s been on Medi-Cal for close to 3 years with this alimony and is just now being told that she doesn’t qualify.

    My mom is self employed and reported a loss of $6000 on her federal taxes as part of her schedule C. Her alimony is $20,0000 annually. Her AGI based on line 37 is around $14,000. She has been repeatedly told that her loss of $6000 and the fact that her AGI based on line 37 of her 1040 is under the income limit for Medi-Cal do not matter, and that her alimony is higher than the income limit and that is all that matters.

    Based on everything that I’ve found online, including what is on your website, it seems like she should be eligible for Medi-Cal. She has been told on the phone and in person at the Medi-Cal office that she is not eligible and will not have Medi-Cal as of the end of August.

    Is there any advice you can give us?

    Thank you!

    Reply

    • Here’s our page on Alimony.

      Near as I can tell and I’m not allowed to give tax advice, if the divorce settlement was done before 12.31.2018, alimony counts as income.

      But you are right, Medi Cal is based on MAGI income as defined above. Line 37 – now 7 + …

      $14k qualifies one for Medi Cal see chart.

      Here’s our page on MAGI income qualification for Medi Cal.

      Here’s our contact page for Medi Cal Try emailing your question and my research to this address [email protected]

      B. Counting Income

      MAGI Medi-Cal and MCAP use largely the same MAGI methodology that is used by Covered California for counting income. Taxable income, Social Security benefits, tax-exempt interest and foreign earned income are all included.

      2. Income Threshold for Financial Assistance

      Most adults with household incomes up to 138% FPL in California are eligible for Medi-Cal (for children, the income standard is set at 266% FPL), and as described above, eligibility for Medi-Cal precludes eligibility for Covered California. In the vast majority of cases, an individual must have household income above 138% FPL to qualify for premium tax credits – and most children must be in families with incomes above 266% FPL in order to obtain premium tax credits. Western Poverty Law *

      What is your Mother’s expected income for 2019? 2020? When income gets too high, then you can get subsidized coverage with Covered CA. Get quotes here. No charge to have us as your broker.

      the IRS does often rely on what is known as the “3-of-5 test.” This means that a successful small business should typically earn a profit three of every five years. If you have attempted to turn your hobby into a profitable business for seven years with no success, it may become difficult to claim profit as your true motivation. biz fluent.com

      Our webpage on hobby or business

      Reply

  11. We are having technical difficulties with replies being indented.

    Here’s the question, I’m answering:

    Anonymous Asks:

    I called Covered CA and told them my income was the following:

    To date Jan thru Feb 25, 2018 for Bxx Hxxx I have received 4 paychecks. YTD gross for them is $3838.00.

    Txxx On Rxxx less than $500.00 this year.

    Just started with CxxC on Feb 26, 2018 and so far received a check for approximately $274.02 from them.

    My premium just took a drastic jump, Why?

    *************************************************************
    Our Reply

    First of all, while Covered CA did add all the entry pages for ones income and deductions, IMHO (In my Humble Opinion) it’s best to just figure out what you are going to have as MAGI income at the end of the year on your tax return. It’s basically line 37. Scroll to the top of this page for more detail.

    If you are going to fill out the entire form, then again IMHO it’s best to log into your Covered CA account and complete the form yourself. Here’s our webpage on how to update, change your income.

    I do not recommend just calling and having someone else enter information for you. This is also why, we prefer that you email us rather than call. This is how someone whose income went from $15/hour to $15.20/hour gets hit with $40k in income, when it should be closer to $25k, being as she’s a teacher and doesn’t work summers.

    Here’s our free quote engine to figure your subsidy based on the income you project for the current year. The PAST is not relevant, unless your projected income is in question and Covered CA wants some kind of proof.

    Excerpt of Covered CA Income Entry Page

    Reply

  12. i am head of household (IRS and CA FTB – CA Taxes) for my daughter and grandson who are both adults and grandaughter who is 2 yo.

    The three live full time with me, they have no income, and are all on medi-cal (no special circumstances).

    my AGI in 2016 will be approximately $78,000.

    can i claim them as dependents for tax purposes and still keep them on medi-cal?

    Reply

  13. I am in the process of applying, [for Covered CA] I do long form taxes, [1040] can I deduct car registrations, home property taxes, amortization from rental and expenses on rental to lower my income.

    Reply

    • MAGI income is defined at the top of this page. MAGI is line 37 of your 1040 plus foreign income, tax exempt interest and some Social Security benefits. For details of what goes on line 17 Rental Income, please see our rental income page. We are happy to be your agent for Covered CA and there is no additional charge. Click here for instructions to appoint us if you already have an account with them.

      Reply

    • Know how adjusted gross income affects taxes
      • A taxpayer’s AGI and tax rate are important factors in figuring their taxes. AGI is their income from all sources minus any adjustments or deductions to their income.

      Generally, the higher the AGI, the higher their tax rate, and the more tax they pay.
      • Tax planning can include making changes during the year that can lower a taxpayer’s AGI. The taxpayer could:
      o Contribute to a Health Savings Account
      o Claim educator expenses if they’re a qualifying educator
      o Pay student loan interest

      A full list is on Schedule 1 of Form 1040.https://www.irs.gov/pub/irs-pdf/f1040s1.pdf

      Save for retirement
      • Retirement savings can also lower AGI. https://www.irs.gov/retirement-plans
      o Contributing money to a retirement plan at work like a 401(k) plan can reduce a taxpayer’s AGI.
      o Investing in a traditional IRA plan is another way to save for retirement and lower AGI.
      o Self-employed SEP, SIMPLE, and qualified plans are also retirement options that can lower AGI.

      Reply

  14. Hi,

    I have a couple of questions for you:

    I am currently receiving Medi-Cal and have had an increase in wages which has brought me to $16,938 in annual income. I desperately want to be enrolled in the Kaiser silver 94 HMO benefits through covered California.

    Will the increase in wages be considered a qualifying event?

    If I were to have you assist me would that remove the DHCS caseworker from determining approval or speed up the process?

    Thank you

    Reply

  15. I am moving and am using special enrollment to change my healthcare coverage. According to the rules, if I apply before the 15th of a month, coverage begins on the 1st of the following month. If I apply after the 15th, then coverage begins on the 1st of the second month after I apply. Thus coverage can start up to a maximum of 45 days or so after I apply.

    In applying, I was declared as conditionally eligible” due to them requiring that I “verify income” by 90 days after my application date.

    My question is:

    Will I be uninsured for the period after my coverage is suppose to start up until the day the approve my attempt to verify income? This could be a 45 day period in which I need medical care. Or will I be covered for those 45 days and if they reject my verification of income – then will they drop me from my new plan?

    Thanks for all the help on your website!

    Reply

  16. If a person owns property and is on Covered California will all the medical expenses have to be payed paid back after the death of the person on Covered California?

    Reply

  17. Hi Steve,

    I’m enrolled in anthem blue cross viA California Covered Care.

    I get letters that contradict each other routinely. One letter says I’m covered , the other says I’m not.
    I’ve spent hours on phone with California covered care with people who have questionable English literacy.

    I need a professional to deal with California Covered as they are too disorganized for a non insurance specialist to deal with all their idiosyncratic behavior.

    Can you help me ?

    Thanks,

    Martin

    Reply

    • Yes, we would be glad to help you. Two things that you need to do to transfer your case to us.

      1. Change your Covered CA agent delegation to use. Here are the instructions. If you have trouble, just send us your user name and password and we can do it.

      2. Email us for the Blue Cross Change of Broker Form Blue Cross though has tricky rules and if you are a “house account” they might not pay us.

      Once we have access to your Covered CA account, we can view all the letters they send you. If Blue Cross won’t recognize us as your agent, then:

      3. Get an ONLINE Member Account and give us the user name and password for that.

      Then we should be fully able to help you. If you were to get additional coverage, like Life Insurance, Long Term Care or Disability that would be a way to compensate us for our time, if you are a “House Account” or you had coverage with Blue Cross prior to 1.2014.

      Steve

      Reply

  18. I am currently receiving Medi-Cal due to low income (my MAGI is less than 138% FPL).

    On my 65th birthday, I will get to keep Medi-Cal just by being 65 years old, even if my MAGI is greater than 138% FPL. Is this assumption correct ?

    Regards,
    Tom N

    Reply

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