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How to estimate your expected income

When you fill out a health insurance application and use some tools on this website, you’ll need to estimate your expected income. Two important things to know:

  • Marketplace savings are based on your expected household income for the year you want coverage, not last year’s income.
  • Income is counted for you, your spouse, and everyone you’ll claim as a tax dependent on your federal tax return (if the dependents are required to file).  Include their income even if they don’t need health coverage. See details on who to include in your household.

How to make an estimate of your expected income

Step 1. Start with your household’s adjusted gross income (AGI) from your most recent federal income tax return.

Don’t have recent AGI? See another way to estimate your income.

Step 2. Add the following kinds of income, if you have any, to your AGI:

  • Tax-exempt foreign income
  • Tax-exempt Social Security benefits (including tier 1 railroad retirement benefits)
  • Tax-exempt interest

Don’t include Supplemental Security Income (SSI).

Step 3. Adjust your estimate for any changes you expect.

Consider things like these for all members of your household:

  • Expected raises
  • New jobs or other employment changes, including changes to work schedule or self-employment income
  • Changes to income from other sources, like Social Security or investments
  • Changes in your household, like gaining or losing dependents. Gaining or losing a dependent can have a big impact on your savings.

Now you have an estimate of your expected income.

Estimating unpredictable income

It’s hard to predict your income if you’re unemployed, self-employed, on commission, or on a work schedule that changes regularly.

If your income is hard to predict, base your estimate on your past experience, recent trends, what you know about possible changes at your workplace, and similar information. If the job is new to you, ask people in the same field or in the same company about their experiences.

Get help estimating income and expenses with our income calculator.

Learn more about how to estimate your expected income if you’re:

  • Unemployed
  • Self-employed

Notice:

IMPORTANT Update your Marketplace application as soon as possible when your income or household members change during the year. Learn how to update your information during the year.

Who to include in your household

For the Health Insurance Marketplace®, a household usually includes the tax filer, their spouse if they have one, and their tax dependents.

Tax filer + spouse + tax dependents = household

Follow these basic rules when including members of your household:
  • Include your spouse if you’re legally married.
  • If you plan to claim someone as a tax dependent for the year you want coverage, do include them on your application.
  • If you won’t claim them as a tax dependent, don’t include them.
  • Include your spouse and tax dependents even if they don’t need health coverage.
See the limited exceptions to these basic rules in the chart below.
Learn more about who you can claim as a tax dependent from the IRS.

Who to include in your household
Relationship Include in household? Notes
Dependent children, including adopted and foster children Yes Include any child you’ll claim as a tax dependent, regardless of age.
Children, shared custody Sometimes Include children whose custody you share only during years you claim them as tax dependents.
Non-dependent child under 26 Sometimes Include them only if you want to cover them on your Marketplace plan.
Children under 21 you take care of Yes Include any child under 21 you take care of and who lives with you, even if not your tax dependent.
Unborn children No Don’t include a baby until it’s born. You have up to 60 days after the birth to enroll your baby.
Non-dependent child or other relative living with you No Include them only if you’ll claim them as tax dependents.
Dependent parents Yes Include parents only if you’ll claim them as tax dependents.
Dependent siblings and other relatives Yes Include them only if you’ll claim them as tax dependents.
Spouse Yes Include your legally married spouse, whether opposite sex or same sex. In most cases, married couples must file taxes jointly to qualify for savings.
Legally separated spouse No Don’t include a legally separated spouse, even if you live together.
Divorced spouse No Don’t include a former spouse, even if you live together.
Spouse, living apart Yes Include your spouse unless you’re legally separated or divorced. (See next row for an important exception.)
Spouse, if you’re a victim of domestic abuse, domestic violence, or spousal abandonment Not required In these cases, you don’t have to include your spouse. See rules for victims of domestic abuse, domestic violence, or spousal abandonment.
Unmarried domestic partner Sometimes Include an unmarried domestic partner only if you have a child together or you’ll claim your partner as a tax dependent.
Roommate No Don’t include people you just live with — unless they’re a spouse, tax dependent, or covered by another exception in this chart.

What to include as income

When you fill out a Marketplace application, you’ll need to estimate what your household income for the year.
  • Marketplace savings are based on your expected household income for the year you want coverage, not last year’s income.
  • You’ll be asked about your current monthly income and then about your yearly income.

Notice:

Make your best estimate for your income
This way, you qualify for the right amount of savings. Otherwise, you could have to pay money back when you file your federal tax return. If your income changes during the year, you can update your application.
The Marketplace uses a number called “modified adjusted gross income (MAGI)" to determine if you qualify for savings.
What’s a modified adjusted gross income (MAGI)?
Get more information on how to estimate your modified adjusted gross income.

Whose income to include in your estimate

For most people, a household consists of:
  • The tax filer
  • Their spouse if they have one
  • Their tax dependents, including those who don’t need coverage
The Marketplace counts estimated income of all household members. Learn more about who’s counted in a Marketplace household.

What income types to count in your estimate

Count these income types:
  • Alimony from divorces and separations finalized before January 1, 2019
  • Capital gains
  • Excluded (untaxed) foreign income
  • Federal taxable wages (from your job)
  • Investment income
  • Rental and royalty income
  • Retirement or pension income
  • Self-employment income
  • Social Security
  • Social Security Disability Income (SSDI)
  • Tips
  • Unemployment compensation
Don’t count these income types:
  • Alimony for divorces and separations finalized on or after January 1, 2019
  • Child support
  • Child Tax Credit checks or deposits (from the IRS)
  • Gifts
  • Proceeds from loans (like student loans, home equity loans, or bank loans)
  • Supplemental Security Income (SSI)
  • Veterans’ disability payments
  • Worker’s compensation
If you expect other income types or have questions, get details on what counts as income from the IRS.