Mere Benefits
Income Guide

Calculating Your Household Income for Marketplace Coverage: What Counts and What Doesn’t

When applying for health insurance through the Marketplace, you’ll need to estimate your Modified Adjusted Gross Income (MAGI).Your tax household includes everyone you claim as a dependent on your tax return, even if they have separate insurance. Here’s a quick guide to help:

Income - What Counts

GROSS

BEFORE TAX

  • Job (Salary, wages, tips)

  • Unemployment

  • ALL Social Security

  • Retirement (IRA/401(K)) Income

  • Pension Benefits

  • Disability Income

  • Alimony Received (>2019)

NET

AFTER TAX

  • Business (Profit/Loss)

  • Investments

  • Bank Interest

  • Rental & Royalties

  • Sale of Property

  • Gambling, prizes, awards

  • Crypto/NFT's

NOT APPLICABLE

IGNORE

  • Child Support Received

  • Alimony Received (<2019)

  • VA Disability

  • Personally Owned DI - Income

  • Health Related Lawsuit Pay

ACA Household Infographic

ACA Household Infographic

Income That Counts:

  • Wages and salaries (before taxes)

  • Self-employment income (after business deductions)

  • Social Security benefits (including retirement and disability, but not SSI)

  • Retirement or pension income

  • Unemployment compensation

  • Rental or royalty income

  • Alimony (if divorce was finalized before 2019)

  • Investment income (interest, dividends, capital gains)

  • Tips or bonuses

  • Taxable scholarships or grants

Income That Does NOT Count:

  • Child support

  • Supplemental Security Income (SSI)

  • Gifts or financial support from others

  • Loans

  • Workers’ compensation

  • Income tax refunds

  • Non-taxable VA benefits

  • Life insurance payouts

For guidance, you can refer to your most recent tax return. This amount will generally be similar to Line 11 on Form 1040 if your income is expected to be close to that amount. If you’re unsure about specific income details, please consult a CPA for assistance.

Self-Employed? Here's How to Estimate Your Income


If you're self-employed—whether you're a freelancer, gig worker, or small business owner—you'll need to estimate your net self-employment income when applying for Marketplace coverage. This is your total income minus business expenses.

What to Include:

  • Income from freelance or contract work

  • Earnings from your business or side hustle

  • Rideshare or delivery income (e.g., Uber, Lyft, DoorDash)

What to Subtract (Allowable Business Expenses):

  • Office supplies and equipment

  • Advertising and marketing costs

  • Business travel and mileage

  • Home office expenses

  • Internet and phone bills (portion used for business)

  • Other allowable business expenses not shown here

Tip: If your income varies, use your best estimate for the entire year. You can update it later if your income changes.

Man seeing everything

Estimating Unpredictable Income

When your income fluctuates, estimating your annual income can be challenging. Here's how you can approach it:

What to Include:

  • Review Past Income:

    Look at your income from previous years to identify patterns or averages.

  • Consider Current Trends:

    Account for any recent changes in your business that might affect income.

  • Project Monthly Income:
    Estimate your average monthly income and multiply by the number of months you expect to work.

  • Account for Business Expenses:
    If you’re self-employed, remember to subtract any eligible business expenses to calculate your
    net income for Marketplace purposes.

Man having problem about expenses

Example : If you earn approximately $1,500 per month from freelance graphic design and plan to work all 12 months, first estimate your gross income:

  • Gross monthly income: $1,500

  • $1,500 × 12 months = $18,000 estimated gross income

Next, subtract your estimated business expenses to find your net income:

  • If you expect $500/month in expenses, that’s $500 × 12 = $6,000 in annual expenses

  • Net annual income: $18,000 - $6,000 = $12,000

If you also anticipate earning $500/month from tutoring for 6 months (no expenses):

  • $500 × 6 months = $3,000 additional net income

Total Estimated Annual Income (net):

  • $12,000 (freelance graphic design) + $3,000 (tutoring) =
    $15,000

Note : Be sure to adjust for any other income types you expect, and review your past tax returns (Line 11 on Form 1040) for a closer match to your AGI.

Form 1040 Tax Return

Note : For most people, your MAGI will be your AGI plus any tax-exempt interest or foreign income, which are uncommon.


⚠️ Important Disclaimer

This page is intended to help you estimate your income for Marketplace purposes. It is not tax advice. Each tax household is responsible for ensuring their income estimate is as accurate as possible. This matters because any Advanced Premium Tax Credit (APTC) received will be reconciled when you file your taxes the following year. If your estimate is too low, you may owe money back. If it's too high, you may get a refund. When in doubt, consult a tax professional. At Mere we are not tax professional

Licensed Insurance Agency

Not connected with or endorsed by the United States government or the federal Medicare program

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or ‍1-800-MEDICARE to get information on all of your options.

Medicare has neither reviewed nor endorsed this information. Not affiliate with or endorsed by the United States government, the federal Medicare program. Social Security, or
Healthcare.gov.


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