Modified Adjusted Gross Income (MAGI)
Updated for plan year 2026
In plain terms
Modified Adjusted Gross Income (MAGI) is the income figure the marketplace uses to decide your subsidies and Medicaid eligibility. It starts with your adjusted gross income and adds back a few items: tax-exempt interest, untaxed foreign income, and the non-taxable portion of Social Security benefits. It counts your whole household's income for the calendar year, including wages, self-employment income, unemployment, and severance, not your income this month. Some sources, like SNAP, child support received, and gifts, don't count.
A plain example
You estimate $48,000 in wages, plus $1,500 of tax-exempt municipal-bond interest and $3,000 of unemployment from earlier in the year. Your MAGI for the marketplace is roughly $52,500, not the $48,000 on your pay stubs. That higher figure is what the marketplace compares to the federal poverty level to size your premium tax credit.
Why it matters
MAGI, not your take-home pay, is what the marketplace measures, so leaving out add-backs like unemployment or tax-exempt interest produces a too-low estimate and a subsidy you may have to repay. Getting MAGI right is how you get your subsidy right.
A common point of confusion
MAGI isn't your monthly income or your gross paycheck. It's an annual, whole-household figure built from adjusted gross income with specific add-backs, so both undercounting, like skipping unemployment, and using a single month's pay can throw your subsidy off.