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How does one add back in
social security benefits that were not included in income on line 20 of their 1040 to
calculate MAGI for Covered CA?
When calculating the Premium Tax Credit, (Subsidy) MAGI-Modified Adjusted Gross Income (AGI) is the bottom line number on line #37 on your 1040 tax return then add back in the difference between line 20a and 20b of your 1040.
See the explanation, screen shots and references at right & below to better understand out it all works. Please note that neither I nor Covered CA give tax advise. Here’s where Covered CA’s advise caused someone to pay back $13k in subsidies.
Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.
No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:
- file a federal tax return as an “individual” and your combined income* is
- between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
- more than $34,000, up to 85 percent of your benefits may be taxable.
- file a joint return, and you and your spouse have a combined income* that is
- between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
- more than $44,000, up to 85 percent of your benefits may be taxable.
- are married and file a separate tax return, you probably will pay taxes on your benefits.
+ Nontaxable interest
+ ½ of your Social Security benefits
= Your “combined income“
Each January you will receive a Social Security Benefit Statement (Form SSA-1099) showing the amount of benefits you received in the previous year. You can use this Benefit Statement when you complete your federal income tax return to find out if your benefits are subject to tax. Request an SSA 1099 ♦ SSA.Gov ♦ Page 14 Retirement Guide Pub. 10035 ♦ 26 US Code §86 Taxable Income Social Security
IRS Social Security Benefits Worksheet for 1040 lines 20a & 20b
This is a technical page – Please see our MAGI page for an introduction.
We are not CPA or Attorneys and are not giving tax or legal advise. That’s why we link to the actual law, IRS or Covered CA publications.
C Social Security – Covered CA – MAGI???
(2) Modified adjusted gross income means adjusted gross income (line 37) within the meaning of section 62 (definition of AGI) increased by—
not included in gross income under section 26 USC § 86(d) repayments for prior year over payment?
[Might not apply to Medi Cal Eligibility?]
Berkeley – Non-taxable Social Security benefits (Line 20a minus 20b on a Form 1040
Footnote 4 Social Security benefits” includes disability payments (SSDI), but does not include Supplemental Security Income (SSI), (SSI gives cash assistance to people with limited income and resources who are age 65 or older, blind or disabled. )SSA.Gov which should be excluded Berkley 26 USC 86 D )
Special enrollment periods no longer will be available for:
- Consumers who were affected by Social Security income tax errors; Learn More ⇒CA Health Line – Health Affairs.org 1.20.2016
More in our Social Security Section of this website
Polk Family has to pay back $13k in tax credits – subsidies – Insure Me Kevin.com Wrong advise from Covered CA