Modified Adjusted Gross Income (MAGI) What the Heck is It?

The Federal Government determines your eligibility for a premium subsidy and penalties for not having insurance on your Modified Adjusted Gross Income (MAGI). We get questions on this all the time.  To help simplify things (as much as taxes can be simplified) here is a quick explanation. (Please note, we are NOT tax professionals, this is NOT tax advice.)

What is MAGI?

Modified Adjusted Gross Income is your adjusted gross income (AGI) plus a few specific deductions.  In order to find your modified adjusted gross income, you first need to find your adjusted gross income.

Find Your AGI

Your adjusted gross income is your total or gross income minus certain deductions. You can find it on:

• Form 1040, line 38
• Form 1040A, line 22
• Form 1040EZ, line 4
• Form 1040NR, line 37

The Modified

Here is where the “modified” part comes into play. To find your MAGI you’ll have to add deductions some deductions back into your AGI:

• Non-taxable Social Security benefits
• Tax-exempt interest 
• Income from the foreign earned income exclusion
• Qualified Savings Bond interest income exclusion
• A few other things that are even rarer. . .

Once you add these deductions back to your AGI, you’ll have your MAGI.  Congratulations! 

The ever famous disclaimer:   This just an example.  We are not tax advisors, this is NOT tax advise!  Please contact your tax professional with any questions.  You can also find more detailed information here: UC Berkley Labor Center

Author, Tiffany Geiger, President