Household income includes incomes of the taxpayer, spouse, and dependents. In determining eligibility for exchange subsidies, income is based on your attestation of your expected income in 2016 and verified by the exchange with documentation from your most recent tax return, with consideration for reasonable changes you expect.
More specifically, federal subsidies are based on the size of your household and your household’s 2016 Modified Adjusted Gross Income.
To estimate your 2017 Modified Adjusted Gross Income:
- Add all income earned through wages, interest, dividends, rental and royalty income, capital gains, business income, farm income, unemployment and alimony.
- Add any foreign income, employer-paid adoption expenses and interest from employee savings bonds used to pay higher education expenses.
- Subtract items like moving expenses, alimony paid, self-employment taxes.
Subsidies are applied immediately, so you only pay the net amount after the subsidy.