Question: Please define household income in detail. Specifically, what items are to be included in Modified Adjusted Gross Income (MAGI). I need this in order to calculate how much to expect in tax credits towards my health care premiums under Obamacare.
Answer: Your household income for purposes of calculating eligibility for a subsidy is the adjusted gross income as reported on your tax return subject to variousmodifications. These include deductions for certain expenses such as student loan interest and moving expenses and add-backs for certain additional sources of income such as nontaxable Social Security benefits and tax-exempt interest. The net result is known as your Modified Adjusted Gross Income or MAGI. A complete list of modifications that apply in calculating your MAGI is available from the Labor Center of the University of California at Berkeley, which you can access by clicking here.
Robert I. Field, Ph.D., J.D., M.P.H. is a professor of law at the Earle Mack School of Law and professor of health management and policy at the School of Public Health at Drexel University. He also writes for The Field Clinic blog. Ask Rob your questions about the new healthcare law.