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I'd toss out that second link. It's dealing with eligibility for Medicaid, not with individual plans. Any mention of individual plans in there is probably in passing and only has very general information. (Disclaimer - I only read the title page and quickly scanned through a few other pages).

I believe the first link is wrong.

So let's just go to the source. I'll assume we're talking about MAGI for purposes of the premium credit. If that's not what we're talking about, elaborate further and I'll look into things a bit more.

The source is Internal Revenue Code Section 36B(d)(2)(B), which says:

(B) Modified adjusted gross income

The term "modified adjusted gross income" means adjusted gross income increased by-

(i) any amount excluded from gross income under section 911,

(ii) any amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax, and

(iii) an amount equal to the portion of the taxpayer's social security benefits (as defined in section 86(d)) which is not included in gross income under section 86 for the taxable year.


Let's tease that apart a bit further.

Adjusted Gross Income is a particular line on your tax return. If you're using the full 1040, it's line 37. If you're looking at 1040A it's line 21. And on a 1040EZ it's line 4. Strangely enough, all of these lines are labeled Adjusted Gross Income.

Section 911, referred to in (i) has to do with the Foreign Earned Income Exclusion. If you're excluding any foreign earned income, you have to add that back to AGI.

(ii) is tax exempt interest, most often interest on municipal bonds

(iii) is the non-taxable portion of your social security benefits.

And that's it.

Start with AGI. Add in up to three items to that: excluded foreign earned income, non-taxable interest, and the non-taxable portion of your social security benefits.

As Phil has noted, MAGI is not a single definition. Each particular time MAGI is needed, it is defined for that particular use. So MAGI for purposes of the Premium Credit under the Affordable Care Act is different from MAGI for purposes of determining your IRA deduction. And those are different from any other definition of MAGI.

--Peter
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