Does social security count as income for Healthcare.gov? Yes, Social Security benefits are generally counted as income when determining eligibility for subsidies and cost savings on healthcare plans through Healthcare.gov. income-partners.net understands that navigating the complexities of healthcare eligibility can be daunting, especially when it involves various income sources, our goal is to simplify this process. Explore income verification, eligibility criteria, and affordable care options.
1. Understanding Income and Healthcare.gov
2. Social Security Benefits and Income Calculation
3. How Social Security Income Affects Healthcare.gov Eligibility
4. Types of Social Security Income Included
5. Types of Social Security Income Not Included
6. Reporting Social Security Income on Your Healthcare.gov Application
7. The Premium Tax Credit and Social Security Income
8. Additional Considerations for Social Security Recipients
9. Strategies for Managing Healthcare Costs
10. Frequently Asked Questions (FAQs) About Social Security and Healthcare.gov
Navigating the healthcare landscape can be complex, particularly when it comes to understanding how different income sources affect your eligibility for subsidies and cost savings through Healthcare.gov. Many individuals wonder whether their Social Security benefits count as income for these purposes. Here, we will delve into the intricacies of how Social Security income interacts with Healthcare.gov, providing you with clear, actionable information to make informed decisions about your healthcare coverage.
Alternative text: Form 1095-A Health Insurance Marketplace Statement displays information to assist in completing federal individual income tax returns.
1. Understanding Income and Healthcare.gov
What counts as income under the Affordable Care Act (ACA) and how does it impact your eligibility?
The Affordable Care Act (ACA), also known as Obamacare, provides access to affordable health insurance through the Health Insurance Marketplace, often referred to as Healthcare.gov. Eligibility for subsidies, such as the Premium Tax Credit (PTC) and cost-sharing reductions, depends on your household income. Understanding what constitutes income under the ACA is crucial for accurately determining your eligibility and avoiding potential issues during tax reconciliation.
1.1 Defining Income for Healthcare.gov
What specific types of earnings are considered income for Healthcare.gov applications?
For Healthcare.gov purposes, income is defined as your Modified Adjusted Gross Income (MAGI). This calculation starts with your Adjusted Gross Income (AGI) and adds back certain deductions. MAGI includes:
- Adjusted Gross Income (AGI): This is your gross income (total income before deductions) minus certain deductions like student loan interest, IRA contributions, and alimony payments.
- Nontaxable Social Security benefits: This includes Social Security retirement, disability, and survivor benefits that are not subject to federal income tax.
- Tax-exempt interest: This is interest income that is not subject to federal income tax.
- Foreign earned income and housing expenses: Income earned while living and working abroad.
1.2 Why Income Matters for Healthcare Subsidies
How does my income level directly affect the amount of financial assistance I can receive?
Your income level is a primary factor in determining your eligibility for financial assistance through Healthcare.gov. The ACA provides subsidies to help lower the cost of health insurance premiums and out-of-pocket expenses for individuals and families with incomes between 100% and 400% of the federal poverty level (FPL).
- Premium Tax Credit (PTC): This subsidy helps lower your monthly health insurance premiums. The amount of the PTC is based on your estimated income for the year and the cost of the benchmark plan (the second-lowest-cost silver plan) in your area.
- Cost-Sharing Reductions (CSR): These subsidies reduce your out-of-pocket costs, such as deductibles, copayments, and coinsurance. CSRs are available to individuals and families with incomes between 100% and 250% of the FPL who enroll in a silver plan.
1.3 Importance of Accurate Income Reporting
Why is it so important to report my income accurately when applying for healthcare coverage?
Accurate income reporting is essential for several reasons:
- Correct Subsidy Calculation: Reporting your income accurately ensures that you receive the correct amount of financial assistance. Underreporting your income may result in receiving a larger subsidy than you are entitled to, which you will have to repay when you file your taxes.
- Avoiding Repayment Issues: When you file your taxes, the IRS will reconcile the advance payments of the PTC with the actual amount of the credit you are eligible for based on your actual income. If your actual income is higher than what you estimated, you may have to repay some or all of the advance payments.
- Maintaining Eligibility: Overreporting your income may result in being denied subsidies or cost-sharing reductions. It is crucial to provide the most accurate estimate possible to ensure you receive the assistance you are eligible for.
- Compliance with the Law: Providing false or misleading information on your Healthcare.gov application is against the law and can result in penalties.
1.4 Resources for Estimating Income
Where can I find tools and resources to help me estimate my income for Healthcare.gov?
Estimating your income can be challenging, especially if you have variable income or multiple income sources. Here are some resources to help you:
- IRS Publication 505, Tax Withholding and Estimated Tax: This publication provides detailed information on how to estimate your income and tax liability.
- Healthcare.gov Income Estimator: This online tool helps you estimate your household income for the year.
- Tax Returns from Previous Years: Reviewing your tax returns from previous years can provide a good starting point for estimating your income.
- Pay Stubs: If you are employed, review your pay stubs to estimate your annual income based on your current pay rate.
- Social Security Administration: The Social Security Administration provides information on your Social Security benefits, which can help you estimate your income from these sources.
Example:
Consider Maria, a self-employed graphic designer in Austin, Texas. In 2023, she estimated her income at $30,000 when she applied for health insurance through Healthcare.gov. Based on this estimate, she received a monthly Premium Tax Credit (PTC) that significantly reduced her health insurance premiums.
However, Maria had a successful year and her actual income turned out to be $40,000. When she filed her taxes, the IRS reconciled her advance PTC payments with her actual income. As a result, Maria had to repay a portion of the PTC because her actual income was higher than her estimated income.
To avoid this issue in 2024, Maria used the Healthcare.gov income estimator and reviewed her income from the previous year. She also considered any expected changes in her business. She estimated her income at $42,000. This more accurate estimate ensured that she received a PTC amount closer to what she was actually eligible for, minimizing the risk of having to repay a significant amount when she filed her taxes.
Alternative text: ACA Marketplace health plans comparison sample shows an example of comparing different healthcare plans and associated costs.
2. Social Security Benefits and Income Calculation
How are Social Security benefits treated when calculating income for Healthcare.gov?
Social Security benefits play a significant role in the income calculation for Healthcare.gov, especially for retirees and individuals with disabilities. Understanding which Social Security benefits are included and how they are treated is essential for accurate reporting.
2.1 Including Social Security in MAGI
What specific Social Security benefits are included in the Modified Adjusted Gross Income (MAGI)?
Most Social Security benefits are included in the MAGI calculation, which is used to determine eligibility for premium tax credits and cost-sharing reductions. Specifically, the following types of Social Security benefits are included:
- Retirement Benefits: These are the monthly payments you receive after you retire, based on your work history and earnings.
- Disability Benefits (SSDI): These benefits are paid to individuals who are unable to work due to a disability.
- Survivor Benefits: These benefits are paid to surviving spouses, children, and other dependents of deceased workers.
- Supplemental Security Income (SSI): While technically a Social Security program, SSI is often treated differently than other Social Security benefits.
2.2 How Social Security Benefits Are Taxed
How does the taxation of Social Security benefits affect the income calculation?
The amount of Social Security benefits included in your MAGI depends on whether your benefits are taxable. The taxation of Social Security benefits is determined by your combined income, which includes your AGI, tax-exempt interest, and one-half of your Social Security benefits.
- Taxable Benefits: If your combined income exceeds certain thresholds, a portion of your Social Security benefits may be subject to federal income tax. The taxable portion of your benefits is included in your AGI, which is a component of your MAGI.
- Nontaxable Benefits: If your combined income is below the thresholds, your Social Security benefits may not be taxable. In this case, the nontaxable portion of your benefits is added back to your AGI to calculate your MAGI.
2.3 Calculating Taxable Social Security Benefits
What is the formula used to determine the taxable portion of my Social Security benefits?
The formula for determining the taxable portion of your Social Security benefits involves comparing your combined income to specific thresholds. These thresholds are based on your filing status.
Here are the general guidelines:
- Single, Head of Household, or Qualifying Widow(er):
- If your combined income is between $25,000 and $34,000, you may have to pay income tax on up to 50% of your Social Security benefits.
- If your combined income is above $34,000, you may have to pay income tax on up to 85% of your Social Security benefits.
- Married Filing Jointly:
- If your combined income is between $32,000 and $44,000, you may have to pay income tax on up to 50% of your Social Security benefits.
- If your combined income is above $44,000, you may have to pay income tax on up to 85% of your Social Security benefits.
- Married Filing Separately:
- If you lived apart from your spouse for the entire year, the rules for single filers apply.
- If you lived with your spouse at any time during the year, you will likely have to pay income tax on up to 85% of your Social Security benefits.
2.4 Example Calculation
Can you provide an example of how Social Security benefits affect the MAGI calculation?
Let’s consider John, a single retiree living in Phoenix, Arizona. In 2024, John received $18,000 in Social Security benefits and had $12,000 in other income (pension and investment income). His combined income is calculated as follows:
- AGI (excluding Social Security): $12,000
- One-half of Social Security benefits: $18,000 / 2 = $9,000
- Combined Income: $12,000 + $9,000 = $21,000
Since John’s combined income is below $25,000, none of his Social Security benefits are taxable. However, for Healthcare.gov purposes, the nontaxable portion of his Social Security benefits is added back to his AGI to calculate his MAGI.
- AGI: $12,000
- Nontaxable Social Security benefits: $18,000
- MAGI: $12,000 + $18,000 = $30,000
John’s MAGI is $30,000, which is used to determine his eligibility for premium tax credits and cost-sharing reductions.
2.5 Resources for Social Security Information
Where can I find reliable information about my Social Security benefits and taxation?
Several resources can help you understand your Social Security benefits and how they are taxed:
- Social Security Administration (SSA): The SSA provides detailed information on Social Security benefits, including retirement, disability, and survivor benefits. You can access your Social Security statement online through the SSA website.
- IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits: This publication provides detailed information on the taxation of Social Security benefits.
- Tax Professionals: A tax professional can help you understand how Social Security benefits affect your tax liability and eligibility for healthcare subsidies.
Alternative text: Social Security Card with name and social security number helps individuals receive benefits and healthcare.
3. How Social Security Income Affects Healthcare.gov Eligibility
How does including Social Security income in my MAGI affect my eligibility for subsidies?
The inclusion of Social Security income in your Modified Adjusted Gross Income (MAGI) directly impacts your eligibility for subsidies and cost-sharing reductions through Healthcare.gov. Understanding this impact can help you better plan for your healthcare coverage.
3.1 Impact on Premium Tax Credit (PTC)
How does Social Security income affect the amount of Premium Tax Credit (PTC) I can receive?
The Premium Tax Credit (PTC) is designed to lower your monthly health insurance premiums. The amount of the PTC you receive is based on your estimated MAGI and the cost of the benchmark plan (the second-lowest-cost silver plan) in your area.
- Higher MAGI: If your MAGI is higher due to the inclusion of Social Security income, you may be eligible for a smaller PTC. This means you will pay a larger portion of your monthly premiums.
- Lower MAGI: If your MAGI is lower, you may be eligible for a larger PTC, which can significantly reduce your monthly premiums.
Example:
Consider two individuals, Sarah and Tom, both living in Dallas, Texas. They are both 64 years old and purchasing health insurance through Healthcare.gov.
- Sarah: Receives $20,000 in Social Security benefits and has $10,000 in other income. Her MAGI is $30,000.
- Tom: Receives $10,000 in Social Security benefits and has $20,000 in other income. His MAGI is also $30,000.
Although Sarah and Tom have the same MAGI, the composition of their income differs. This can affect the amount of the PTC they are eligible for.
To illustrate, let’s assume that the benchmark plan in Dallas costs $600 per month. Without any subsidies, Sarah and Tom would each have to pay $7,200 per year for their health insurance.
Based on their MAGI of $30,000, Sarah and Tom are both eligible for a PTC. However, the exact amount of the PTC depends on the applicable percentage used to calculate the expected contribution. This percentage varies based on income and is updated annually by the IRS.
For the sake of this example, let’s assume that the applicable percentage for a MAGI of $30,000 is 8.5%. This means that Sarah and Tom are expected to contribute 8.5% of their income towards health insurance, which is $2,550 per year ($30,000 * 0.085).
The PTC is calculated as the difference between the cost of the benchmark plan and the expected contribution.
- PTC: $7,200 (annual cost of benchmark plan) – $2,550 (expected contribution) = $4,650 per year
Both Sarah and Tom would be eligible for a PTC of $4,650 per year, which would reduce their monthly premiums to $212.50 ($600 – ($4,650 / 12)).
3.2 Impact on Cost-Sharing Reductions (CSR)
How does Social Security income affect my eligibility for Cost-Sharing Reductions (CSR)?
Cost-Sharing Reductions (CSR) lower your out-of-pocket costs, such as deductibles, copayments, and coinsurance. CSRs are available to individuals and families with incomes between 100% and 250% of the FPL who enroll in a silver plan.
- Higher MAGI: If your MAGI is higher due to the inclusion of Social Security income, you may not be eligible for CSRs, or you may be eligible for a lower level of CSR. This means you will have higher out-of-pocket costs when you receive healthcare services.
- Lower MAGI: If your MAGI is lower, you may be eligible for CSRs, which can significantly reduce your out-of-pocket costs.
Example:
Consider Maria, a 62-year-old retiree living in Miami, Florida. She receives $15,000 in Social Security benefits and has $5,000 in other income. Her MAGI is $20,000.
Maria enrolls in a silver plan through Healthcare.gov and is eligible for CSRs because her income is between 100% and 250% of the FPL. The CSRs reduce her deductible from $5,000 to $1,000 and lower her copayments for doctor visits.
If Maria’s MAGI were higher, say $35,000, she would not be eligible for CSRs. In this case, she would have to pay the full deductible and higher copayments, increasing her out-of-pocket healthcare costs.
3.3 Income Thresholds for Subsidies
What are the income thresholds for qualifying for subsidies through Healthcare.gov?
The income thresholds for qualifying for subsidies through Healthcare.gov are based on the federal poverty level (FPL). These thresholds vary depending on your household size and are updated annually by the Department of Health and Human Services (HHS).
As of 2024, the income thresholds for the 48 contiguous states and the District of Columbia are as follows:
| Household Size | 100% FPL | 138% FPL | 150% FPL | 200% FPL | 250% FPL | 300% FPL | 400% FPL |
|---|---|---|---|---|---|---|---|
| 1 | $14,580 | $20,120 | $21,870 | $29,160 | $36,450 | $43,740 | $58,320 |
| 2 | $19,720 | $27,214 | $29,580 | $39,440 | $49,300 | $59,160 | $78,880 |
| 3 | $24,860 | $34,307 | $37,290 | $49,720 | $62,150 | $74,580 | $99,440 |
| 4 | $30,000 | $41,400 | $45,000 | $60,000 | $75,000 | $90,000 | $120,000 |
| 5 | $35,140 | $48,493 | $52,710 | $70,280 | $87,850 | $105,420 | $140,560 |
| 6 | $40,280 | $55,586 | $60,420 | $80,560 | $100,700 | $120,840 | $161,120 |
| 7 | $45,420 | $62,679 | $68,130 | $90,840 | $113,550 | $136,260 | $181,680 |
| 8 | $50,560 | $69,773 | $75,840 | $101,120 | $126,400 | $151,680 | $202,240 |
3.4 Strategies for Managing MAGI
Are there any strategies to manage my MAGI to maximize my eligibility for subsidies?
Yes, there are several strategies you can use to manage your MAGI and potentially increase your eligibility for subsidies:
- Maximize Retirement Contributions: Contributing to tax-deferred retirement accounts, such as 401(k)s and traditional IRAs, can lower your AGI, which in turn lowers your MAGI.
- Health Savings Account (HSA) Contributions: If you are eligible for a Health Savings Account (HSA), contributing to it can also lower your AGI.
- Deductible Expenses: Claim all eligible deductions, such as student loan interest, alimony payments, and self-employment expenses, to reduce your AGI.
Example:
Consider David, a self-employed consultant in Denver, Colorado. He estimates his income for the year to be $45,000, which puts him just above the threshold for receiving CSRs.
David decides to contribute $5,000 to a traditional IRA. This reduces his AGI to $40,000, which lowers his MAGI as well. As a result, he becomes eligible for CSRs, significantly reducing his out-of-pocket healthcare costs.
3.5 Seeking Professional Advice
When should I seek professional advice regarding my Social Security income and Healthcare.gov eligibility?
You should seek professional advice if you have complex income situations or are unsure how to accurately report your income on your Healthcare.gov application. A tax professional or financial advisor can help you understand the impact of Social Security income on your eligibility for subsidies and develop strategies to manage your MAGI.
Alternative text: Health subsidy eligibility flowchart displays how income affects cost-sharing reductions and premium tax credits.
4. Types of Social Security Income Included
Which specific types of Social Security income must be included when applying for coverage?
When applying for health insurance coverage through Healthcare.gov, it’s essential to understand which types of Social Security income must be included as part of your household income. This ensures accurate subsidy calculations and avoids potential issues during tax reconciliation.
4.1 Retirement Benefits
Are regular Social Security retirement benefits considered income for Healthcare.gov?
Yes, regular Social Security retirement benefits are considered income for Healthcare.gov. These benefits are the monthly payments you receive after you retire, based on your work history and earnings. Whether these benefits are taxable or nontaxable, they must be included in your Modified Adjusted Gross Income (MAGI).
- Taxable Retirement Benefits: If a portion of your Social Security retirement benefits is subject to federal income tax, that amount is already included in your Adjusted Gross Income (AGI), which is a component of your MAGI.
- Nontaxable Retirement Benefits: If your Social Security retirement benefits are not taxable, the nontaxable portion is added back to your AGI to calculate your MAGI.
Example:
Consider Emily, a retiree living in Seattle, Washington. She receives $1,500 per month in Social Security retirement benefits, totaling $18,000 per year. She also has $10,000 in other income from a part-time job.
To determine her MAGI for Healthcare.gov, Emily needs to consider whether her Social Security benefits are taxable. Her combined income is:
- Other Income: $10,000
- One-half of Social Security Benefits: $18,000 / 2 = $9,000
- Combined Income: $10,000 + $9,000 = $19,000
Since Emily’s combined income is below $25,000 (the threshold for single filers), none of her Social Security benefits are taxable. However, for Healthcare.gov purposes, the full $18,000 in Social Security benefits is added to her AGI to calculate her MAGI.
- AGI: $10,000
- Nontaxable Social Security Benefits: $18,000
- MAGI: $10,000 + $18,000 = $28,000
Emily’s MAGI is $28,000, which is used to determine her eligibility for premium tax credits and cost-sharing reductions.
4.2 Disability Benefits (SSDI)
Do Social Security Disability Insurance (SSDI) benefits count as income?
Yes, Social Security Disability Insurance (SSDI) benefits are also considered income for Healthcare.gov. SSDI benefits are paid to individuals who are unable to work due to a disability. Like retirement benefits, SSDI benefits are included in your MAGI, regardless of whether they are taxable or nontaxable.
- Taxable SSDI Benefits: If a portion of your SSDI benefits is subject to federal income tax, that amount is already included in your AGI.
- Nontaxable SSDI Benefits: If your SSDI benefits are not taxable, the nontaxable portion is added back to your AGI to calculate your MAGI.
Example:
Consider Michael, who receives $1,200 per month in SSDI benefits, totaling $14,400 per year. He also has $6,000 in other income from a part-time job.
To determine his MAGI for Healthcare.gov, Michael needs to consider whether his SSDI benefits are taxable. His combined income is:
- Other Income: $6,000
- One-half of SSDI Benefits: $14,400 / 2 = $7,200
- Combined Income: $6,000 + $7,200 = $13,200
Since Michael’s combined income is below $25,000 (the threshold for single filers), none of his SSDI benefits are taxable. However, for Healthcare.gov purposes, the full $14,400 in SSDI benefits is added to his AGI to calculate his MAGI.
- AGI: $6,000
- Nontaxable SSDI Benefits: $14,400
- MAGI: $6,000 + $14,400 = $20,400
Michael’s MAGI is $20,400, which is used to determine his eligibility for premium tax credits and cost-sharing reductions.
4.3 Survivor Benefits
Are Social Security survivor benefits counted as income for subsidy eligibility?
Yes, Social Security survivor benefits are included as income for Healthcare.gov. These benefits are paid to surviving spouses, children, and other dependents of deceased workers. Like retirement and disability benefits, survivor benefits are included in your MAGI, regardless of whether they are taxable or nontaxable.
- Taxable Survivor Benefits: If a portion of your survivor benefits is subject to federal income tax, that amount is already included in your AGI.
- Nontaxable Survivor Benefits: If your survivor benefits are not taxable, the nontaxable portion is added back to your AGI to calculate your MAGI.
Example:
Consider Lisa, a surviving spouse who receives $1,000 per month in survivor benefits, totaling $12,000 per year. She also has $8,000 in other income from a part-time job.
To determine her MAGI for Healthcare.gov, Lisa needs to consider whether her survivor benefits are taxable. Her combined income is:
- Other Income: $8,000
- One-half of Survivor Benefits: $12,000 / 2 = $6,000
- Combined Income: $8,000 + $6,000 = $14,000
Since Lisa’s combined income is below $25,000 (the threshold for single filers), none of her survivor benefits are taxable. However, for Healthcare.gov purposes, the full $12,000 in survivor benefits is added to her AGI to calculate her MAGI.
- AGI: $8,000
- Nontaxable Survivor Benefits: $12,000
- MAGI: $8,000 + $12,000 = $20,000
Lisa’s MAGI is $20,000, which is used to determine her eligibility for premium tax credits and cost-sharing reductions.
4.4 Lump-Sum Payments
How are lump-sum Social Security payments treated for income calculation?
Lump-sum Social Security payments, such as retroactive payments or death benefits, are also considered income for Healthcare.gov. These payments should be included in your income for the year in which they are received.
- Retroactive Payments: If you receive a lump-sum payment for past Social Security benefits, include the full amount in your income for the year you receive it.
- Death Benefits: If you receive a lump-sum death benefit from Social Security, include the full amount in your income for the year you receive it.
Example:
Consider Robert, who receives a lump-sum payment of $5,000 in retroactive Social Security disability benefits in 2024. He also receives regular monthly SSDI payments of $1,000 per month, totaling $12,000 per year.
To determine his MAGI for Healthcare.gov, Robert needs to include both the lump-sum payment and the regular monthly payments in his income.
- Regular SSDI Payments: $12,000
- Lump-Sum Payment: $5,000
- Total Social Security Income: $12,000 + $5,000 = $17,000
Robert’s total Social Security income for 2024 is $17,000, which is added to his other income to calculate his MAGI.
4.5 Accurate Reporting Is Key
Why is it so important to ensure all types of Social Security income are reported accurately?
Accurate reporting of all types of Social Security income is crucial for several reasons:
- Correct Subsidy Calculation: Reporting your income accurately ensures that you receive the correct amount of financial assistance. Underreporting your income may result in receiving a larger subsidy than you are entitled to, which you will have to repay when you file your taxes.
- Avoiding Repayment Issues: When you file your taxes, the IRS will reconcile the advance payments of the PTC with the actual amount of the credit you are eligible for based on your actual income. If your actual income is higher than what you estimated, you may have to repay some or all of the advance payments.
- Maintaining Eligibility: Overreporting your income may result in being denied subsidies or cost-sharing reductions. It is crucial to provide the most accurate estimate possible to ensure you receive the assistance you are eligible for.
By understanding which types of Social Security income must be included and accurately reporting them on your Healthcare.gov application, you can ensure that you receive the correct amount of financial assistance and avoid potential issues during tax reconciliation.
Alternative text: Social Security retirement options chart visualizes retirement income and available choices for Social Security recipients.
5. Types of Social Security Income Not Included
Are there any Social Security benefits that are excluded from income when applying for healthcare subsidies?
While most Social Security benefits are included as income for Healthcare.gov, there are a few exceptions. Understanding these exceptions is important for accurately determining your Modified Adjusted Gross Income (MAGI) and eligibility for subsidies.
5.1 Supplemental Security Income (SSI)
Is Supplemental Security Income (SSI) considered income for Healthcare.gov purposes?
Supplemental Security Income (SSI) is generally not counted as income for Healthcare.gov purposes. SSI is a needs-based program that provides cash assistance to aged, blind, and disabled individuals with limited income and resources.
- Exclusion from MAGI: Unlike Social Security retirement, disability, and survivor benefits, SSI is typically excluded from the MAGI calculation. This means that if you receive SSI, it will not be included in your income when determining your eligibility for premium tax credits and cost-sharing reductions.
- Medicaid Eligibility: Individuals who receive SSI are often eligible for Medicaid, which provides comprehensive healthcare coverage with minimal out-of-pocket costs.
Example:
Consider Maria, who receives $800 per month in SSI benefits, totaling $9,600 per year. She has no other income.
For Healthcare.gov purposes, Maria’s MAGI is $0 because SSI is not included in the calculation. This makes her eligible for significant financial assistance if she chooses to purchase a plan through the Marketplace. However, since she receives SSI, she is likely eligible for Medicaid, which may be a better option for her.
5.2 Social Security Income for Dependents
If my dependent child receives Social Security, is that included in my household income?
Social Security income received by a dependent child is not included in your household income for Healthcare.gov purposes, as long as the child is filing their own tax return.
Example:
Consider John and his 18-year-old son, David. David receives $500 per month in Social Security survivor benefits, totaling $6,000 per year. David files his own tax return and is claimed as a dependent on John’s tax return.
For Healthcare.gov purposes, John’s household income does not include David’s Social Security benefits. John’s MAGI is calculated based on his own income, excluding the $6,000 received by David.
5.3 One-Time Payments for Children
How are one-time Social Security payments for dependent children treated?
One-time Social Security payments for children are generally not included in household income for Healthcare.gov purposes, provided that the child files their own tax return.
Example:
Lisa is a single mother with two children. Her children receive a one-time Social Security survivor benefit payment of $3,000 each due to the death of their father. Lisa’s children file their own tax returns to account for these benefits. As these one-time payments are filed separately, they are not included in Lisa’s household income. This exclusion helps her remain eligible for the subsidies, ensuring she can afford essential healthcare coverage.
5.4 Verification of Exclusion
What documentation might I need to verify that certain Social Security income should be excluded?
To verify that certain Social Security income should be excluded from your MAGI, you may need to provide documentation to Healthcare.gov or the IRS. This documentation may include:
- Social Security Benefit Statements: These statements provide detailed information on the type and amount of Social Security benefits you receive.
- Tax Returns: Your tax return can be used to verify whether certain Social Security benefits are taxable or nontaxable.
- Proof of SSI Eligibility: If you receive SSI, you may need to provide documentation from the Social Security Administration verifying your eligibility.
5.5 Seeking Clarification
When should I seek clarification on whether certain Social Security income should be included or excluded?
You should seek clarification if you are unsure whether certain Social Security income should be included or excluded from your MAGI. Contacting Healthcare.gov or a tax professional can help you accurately determine your income and eligibility for subsidies.
*Alternative text: Social Security fact sheet displays detailed information on Supplemental Security Income (SSI) and eligibility
