Modified adjusted gross income (MAGI) is a key determinant of eligibility and premium tax credits under the Affordable Care Act (ACA). It’s calculated by taking adjusted gross income (AGI) from your tax return and adding back certain deductions and exclusions, such as student loan interest and alimony payments.
MAGI is an important calculation because it can significantly impact how much you pay for health insurance. For example, if your MAGI is below a certain threshold, you may be eligible for Medicaid or CHIP. Or, if your MAGI is within a certain range, you may be eligible for premium tax credits that can help you lower your monthly health insurance premiums.