In general, all your Social Security counts when calculating MAGI-Modified Adjusted Gross Income (AGI), that is the bottom line number on line 8b on your 1040 tax return then add back in the difference between line 5a & 5b of your 1040.
Please note that neither I nor Covered CA give tax advice. Here’s where Covered CA’s advise caused someone to pay back $13k in subsidies.
Count Gross Social Security Income
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
- Publication 915 Social Security and Equivalent Railroad Retirement Benefits
Excerpt of Covered CA ONLINE Application – Re: Income
Are Social Security survivor benefits for children considered taxable income?
Yes, under certain circumstances, although a child generally will not receive enough additional income to make the child’s Social Security benefits taxable.
- The taxability of benefits must be determined using the income of the person entitled to receive the benefits.
- If you and your child both receive benefits, you should calculate the taxability of your benefits separately from the taxability of your child’s benefits.
- The amount of income tax that your child must pay on that part of the benefits that belongs to your child depends on the child’s total amount of income and benefits for the taxable year.
To find our whether any of the child’s benefits may be taxable, compare the base amount for the child’s filing status with the total of:
- One-half of the child’s benefits.
- All the child’s other income, including tax-exempt interest.
If the child is single, the base amount for the child’s filing status is $25,000. If the child is married, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits, for the applicable base amount and the other rules that apply to married individuals receiving Social Security benefits.
If the total of (1) one half of the child’s Social Security benefits and (2) all the child’s other income is greater than the base amount that applies to the child’s filing status, part of the child’s Social Security benefits may be taxable. You can figure the taxable amount of the benefits on a worksheet in the Instructions for Form 1040, Instructions for Form 1040A, or in Publication 915.
- Tax Topic 423 – Social Security and Equivalent Railroad Retirement Benefits
- 42 CFR 435.603 for Medicaid – ….determining ongoing eligibility for beneficiaries determined eligible for Medicaid – Medi-Cal coverage … financial methodologies set forth in this section ….renewal of eligibility for such individual under § 435.916 of this part, whichever is later.
(2) Income of children and tax dependents.(i) The MAGI-based income of an individual who is included in the household of his or her natural, adopted or step parent and is not expected to be required to file a tax return under section 6012(a)(1) of the Code for the taxable year in which eligibility for Medicaid is being determined, is not included in household income whether or not the individual files a tax return.(ii) The MAGI-based income of a tax dependent described in paragraph (f)(2)(i) of this section who is not expected to be required to file a tax return under section 6012(a)(1) of the Code for the taxable year in which eligibility for Medicaid is being determined is not included in the household income of the taxpayer whether or not such tax dependent files a tax return.
Copied from IRS.gov
Is child survivors benefits counted as income even if son is not listed as dependent?
Why isn’t the child on the tax return?
Is your child eligible to be listed as a dependent under IRS Section 152?
(c)Qualifying child For purposes of this section—
(1)In general The term “qualifying child” means, with respect to any taxpayer for any taxable year, an individual—
(A)who bears a relationship to the taxpayer described in paragraph (2),
(B)who has the same principal place of abode as the taxpayer for more than one-half of such taxable year,
(C)who meets the age requirements of paragraph (3),
(D)who has not provided over one-half of such individual’s own support for the calendar year in which the taxable year of the taxpayer begins, and
(E)who has not filed a joint return (other than only for a claim of refund) with the individual’s spouse under section 6013 for the taxable year beginning in the calendar year in which the taxable year of the taxpayer begins.
(2)Relationship For purposes of paragraph (1)(A), an individual bears a relationship to the taxpayer described in this paragraph if such individual is—
(A)a child of the taxpayer or a descendant of such a child, or
(B)a brother, sister, stepbrother, or stepsister of the taxpayer or a descendant of any such relative.
(A)In general For purposes of paragraph (1)(C), an individual meets the requirements of this paragraph if such individual is younger than the taxpayer claiming such individual as a qualifying child and—
(i)has not attained the age of 19 as of the close of the calendar year in which the taxable year of the taxpayer begins, or
(ii)is a student who has not attained the age of 24 as of the close of such calendar year.
(B)Special rule for disabled In the case of an individual who is permanently and totally disabled (as defined in section 22(e)(3)) at any time during such calendar year, the requirements of subparagraph (A) shall be treated as met with respect to such individual.
(4)Special rule relating to 2 or more who can claim the same qualifying child
(A)In general Except as provided in subparagraphs (B) and (C), if (but for this paragraph) an individual may be claimed as a qualifying child by 2 or more taxpayers for a taxable year beginning in the same calendar year, such individual shall be treated as the qualifying child of the taxpayer who is—
(i)a parent of the individual, or
(ii)if clause (i) does not apply, the taxpayer with the highest adjusted gross income for such taxable year.
(B)More than 1 parent claiming qualifying child If the parents claiming any qualifying child do not file a joint return together, such child shall be treated as the qualifying child of—
(i)the parent with whom the child resided for the longest period of time during the taxable year, or
(ii)if the child resides with both parents for the same amount of time during such taxable year, the parent with the highest adjusted gross income.
(C)No parent claiming qualifying child If the parents of an individual may claim such individual as a qualifying child but no parent so claims the individual, such individual may be claimed as the qualifying child of another taxpayer but only if the adjusted gross income of such taxpayer is higher than the highest adjusted gross income of any parent of the individual.
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Life Insurance Buyers Guide
Child & Sibling Pages in MAGI – Modified Adjusted Gross Income – Line 37 »
More in our Social Security Section of this website
and here[Social Security Website] ♦ [Publication 915 – Social Security Benefits – How to prepare your taxes]
Polk Family has to pay back $13k in tax credits – subsidies – Insure Me Kevin.com Wrong advise from Covered CA