How does one add back in

social security benefits that were not included in income on line 5a  of their 1040 to


calculate MAGI for Covered CA or Medi-Cal?

In general, all your Social Security counts when calculating  MAGI-Modified Adjusted Gross Income (AGI), that  is the bottom line number on line 8b  on your 1040 tax return then add back in the difference between line 5a & 5b of your 1040.

Please note that neither I nor Covered CA give tax advice.  Here’s where Covered CA’s advise caused someone to pay back $13k in subsidies.

Count Gross Social Security Income

​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

Summary of what is taxable (SSA.Gov)

Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.

No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:

  • file a federal tax return as an “individual” and your combined income* is
    • between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
    • more than $34,000, up to 85 percent of your benefits may be taxable.
  • file a joint return, and you and your spouse have a combined income* that is
    • between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
    • more than $44,000, up to 85 percent of your benefits may be taxable.
  • are married and file a separate tax return, you probably will pay taxes on your benefits.

*Note:

Your adjusted gross income
+ Nontaxable interest
+ ½ of your Social Security benefits
= Your “combined income
.

Each January you will receive a Social Security Benefit Statement (Form SSA-1099) showing the amount of benefits you received in the previous year. You can use this Benefit Statement when you complete your federal income tax return to find out if your benefits are subject to tax.

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 *

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Do Social Security Survivor Benefits count for MAGI?

Survivor benefits get counted in  Modified Adjusted Gross Income MAGI, for Covered CA subsidies as part of Social Security,  Line 20 from your 1040?

 

YES.  See the screen shot of the Covered CA online application below and the definition of MAGI Income (iii) where Social Security Benefits  §86 except SSI  get added back in.

Please visit our main page on adding untaxed Social Security benefits to your AGI Line 37 to get your MAGI Income for Covered CA health care subsidies.

 

Excerpt of Covered CA ONLINE Application – Re: Income

social.security.question.covered.ca
Interpreting law is outside the scope of my Insurance license.  I’m just pointing it out to you.

26 US Code 86

(a) In general

(1) In general
Except as provided in paragraph (2), gross income for the taxable year of any taxpayer described in subsection (b) (notwithstanding section 207 of the Social Security Act) includes social security benefits in an amount equal to the lesser of—
 
(A) one-half of the social security benefits received during the taxable year, or
(B) one-half of the excess described in subsection (b)(1).

(d) Social security benefit

 (1) In general
For purposes of this section, the term “social security benefit” means any amount received by the taxpayer by reason of entitlement to—
 
.
.

Supplemental Security Income  SSI which  gives cash assistance to people with limited income and resources who are age 65 or older, blind or disabled. Children with disabilities can get SSI, too, is under a different section Title XVI … it doesn’t count as MAGI Berkely

Visit our webpage on Social Security Survivor Benefits

Are Social Security survivor benefits for children considered taxable income?

 

Yes, under certain circumstances, although a child generally will not receive enough additional income to make the child’s Social Security benefits taxable.

  • The taxability of benefits must be determined using the income of the person entitled to receive the benefits.
  • If you and your child both receive benefits, you should calculate the taxability of your benefits separately from the taxability of your child’s benefits.
  • The amount of income tax that your child must pay on that part of the benefits that belongs to your child depends on the child’s total amount of income and benefits for the taxable year.

To find our whether any of the child’s benefits may be taxable, compare the base amount for the child’s filing status with the total of:

  • One-half of the child’s benefits.
  • All the child’s other income, including tax-exempt interest.

If the child is single, the base amount for the child’s filing status is $25,000. If the child is married, see Publication 915Social Security and Equivalent Railroad Retirement Benefits, for the applicable base amount and the other rules that apply to married individuals receiving Social Security benefits.

If the total of (1) one half of the child’s Social Security benefits and (2) all the child’s other income is greater than the base amount that applies to the child’s filing status, part of the child’s Social Security benefits may be taxable. You can figure the taxable amount of the benefits on a worksheet in the Instructions for Form 1040Instructions for Form 1040A, or in Publication 915.

Additional Information:

  • Tax Topic 423 – Social Security and Equivalent Railroad Retirement Benefits
  • 42 CFR 435.603  for Medicaid  – ….determining ongoing eligibility for beneficiaries determined eligible for Medicaid – Medi-Cal coverage … financial methodologies set forth in this section ….renewal of eligibility for such individual under § 435.916 of this part, whichever is later.
    • (2) Income of children and tax dependents.
      (i) The MAGI-based income of an individual who is included in the household of his or her natural, adopted or step parent and is not expected to be required to file a tax return under section 6012(a)(1) of the Code for the taxable year in which eligibility for Medicaid is being determined, is not included in household income whether or not the individual files a tax return.
      (ii) The MAGI-based income of a tax dependent described in paragraph (f)(2)(i) of this section who is not expected to be required to file a tax return under section 6012(a)(1) of the Code for the taxable year in which eligibility for Medicaid is being determined is not included in the household income of the taxpayer whether or not such tax dependent files a tax return.

Copied from IRS.gov

Is child survivors benefits counted as income even if son is not listed as dependent?

Is your child a member of the household?  Check out this Flow Chart

Why isn’t the child on the tax return?

Is your child eligible to be listed as a dependent under IRS Section 152?

(c)Qualifying child  For purposes of this section—

(1)In general The term “qualifying child” means, with respect to any taxpayer for any taxable year, an individual—

(A)who bears a relationship to the taxpayer described in paragraph (2),
(B)who has the same principal place of abode as the taxpayer for more than one-half of such taxable year,
(C)who meets the age requirements of paragraph (3),
(D)who has not provided over one-half of such individual’s own support for the calendar year in which the taxable year of the taxpayer begins, and
(E)who has not filed a joint return (other than only for a claim of refund) with the individual’s spouse under section 6013 for the taxable year beginning in the calendar year in which the taxable year of the taxpayer begins.

(2)Relationship For purposes of paragraph (1)(A), an individual bears a relationship to the taxpayer described in this paragraph if such individual is—

(A)a child of the taxpayer or a descendant of such a child, or
(B)a brother, sister, stepbrother, or stepsister of the taxpayer or a descendant of any such relative.

(3)Age requirements

(A)In general For purposes of paragraph (1)(C), an individual meets the requirements of this paragraph if such individual is younger than the taxpayer claiming such individual as a qualifying child and—

(i)has not attained the age of 19 as of the close of the calendar year in which the taxable year of the taxpayer begins, or
(ii)is a student who has not attained the age of 24 as of the close of such calendar year.

(B)Special rule for disabled In the case of an individual who is permanently and totally disabled (as defined in section 22(e)(3)) at any time during such calendar year, the requirements of subparagraph (A) shall be treated as met with respect to such individual.

(4)Special rule relating to 2 or more who can claim the same qualifying child

(A)In general Except as provided in subparagraphs (B) and (C), if (but for this paragraph) an individual may be claimed as a qualifying child by 2 or more taxpayers for a taxable year beginning in the same calendar year, such individual shall be treated as the qualifying child of the taxpayer who is—

(i)a parent of the individual, or
(ii)if clause (i) does not apply, the taxpayer with the highest adjusted gross income for such taxable year.

(B)More than 1 parent claiming qualifying child If the parents claiming any qualifying child do not file a joint return together, such child shall be treated as the qualifying child of—

(i)the parent with whom the child resided for the longest period of time during the taxable year, or
(ii)if the child resides with both parents for the same amount of time during such taxable year, the parent with the highest adjusted gross income.

(C)No parent claiming qualifying child If the parents of an individual may claim such individual as a qualifying child but no parent so claims the individual, such individual may be claimed as the qualifying child of another taxpayer but only if the adjusted gross income of such taxpayer is higher than the highest adjusted gross income of any parent of the individual.

4 comments on “Social Security Benefits Line 5 a & b

  1. Is my 10,920 in Social Security added in as MAGI?

    I have 62,368 of Adjusted Gross Income.

    I read your article on it and there was a footnote 4. I couldn’t read it.

  2. I am currently on Medi-Cal.

    I may have the opportunity to increase my income to $1.980/mo. (Not sure if this matters – my current income includes early social security $720/mo. in which case, they will take back 50% of every dollar I make over $1,600/mo.)

    Need quote in case my income increases.

    • Is your early Social Security SSDI or do you mean you are taking it a age 62, before your full retirement age?

      If you are taking it early, say age 62 and not disabled the rules about taxation are above and on these two webpages:

      Social Security Benefits

      Social Security Publication # 10069 explains the situation.

      If benefits are withheld Social Security will eventually pay them back to you. See their publication.

      You can get a quote and subsidy calculation based on your expected MAGI Income by clicking here.

      This chart shows how much you can make and still be on Medi-Cal, Enhanced Silver – Cost Sharing reductions or when you earn more than what gets you Covered CA subsidies.

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