What is Modified Adjusted Gross Income (MAGI)?

Modified adjusted gross income (MAGI) is your adjusted gross income (AGI) with certain deductions or untaxed income added back. The IRS and other agencies use it to decide who qualifies for a benefit, a deduction, or a surcharge, and each rule that uses MAGI defines it a little differently.

There is no MAGI line on Form 1040, because there is no single MAGI. Your Roth IRA MAGI, your Affordable Care Act (ACA) MAGI, and your Medicare MAGI can be three different numbers drawn from the same tax return.

How to Calculate MAGI

Start with AGI, found on line 11a of the 2025 Form 1040. Then apply the adjustments for the specific rule you’re checking.

MAGI = AGI + the add-backs that rule requires

The add-backs are mostly items that lower AGI without reducing your real income: tax-exempt interest, the untaxed part of Social Security benefits, income excluded because you worked abroad, and a handful of above-the-line deductions.

If you don’t have tax-exempt interest, Social Security income, foreign income, Roth conversion income, or any of the listed items, every version of your MAGI equals your AGI.

MAGI vs. AGI

AGI is a single line on your return: gross income minus adjustments such as deductible IRA and Health Savings Account (HSA) contributions. MAGI is always derived from AGI, so anything that lowers AGI usually lowers MAGI too. The exceptions are the deductions a given rule adds back. A deductible traditional IRA contribution lowers your AGI, for example, but it is added back when testing your Roth IRA eligibility.

Neither figure subtracts the standard or itemized deduction. Both sit above taxable income, which is why MAGI can be well over a threshold even when your taxable income looks modest.

MAGI for Roth IRA Contributions

Roth IRA eligibility uses the definition in Internal Revenue Code (IRC) section 408A©(3), which borrows the traditional IRA deduction rules and then makes two changes. It adds back any deductible traditional IRA contribution, and it removes income from a Roth conversion. That second change means converting a large traditional IRA balance won’t stop you from making a Roth IRA contribution the same year.

For 2026, the Roth IRA contribution limit phases out between $153,000 and $168,000 of MAGI for single filers and between $242,000 and $252,000 for married couples filing jointly. Above the top of the range, a direct contribution isn’t allowed.

The traditional IRA deduction uses nearly the same definition, minus the conversion carve-out. It only phases out if you or your spouse is covered by a workplace retirement plan.

MAGI for Medicare IRMAA

Medicare’s IRMAA is a surcharge on Part B and Part D premiums. Its MAGI is AGI plus tax-exempt interest, along with a few rarely used exclusions. Municipal bond interest is free of federal income tax but still counts here.

IRMAA looks back two years. Your 2026 premiums are set by your 2024 tax return, so a Roth conversion or large capital gain at 63 can raise your Medicare costs at 65. The tiers are cliffs: in 2026, single filers with MAGI above $109,000 and joint filers above $218,000 pay at least an extra $81.20 a month for Part B, and a single dollar over a tier triggers the full amount.

Roth conversion income counts toward IRMAA MAGI. With an IRMAA Cliff target in ProjectionLab, you pick the tier to stay below and size each year’s conversions to fit under it.

MAGI for ACA Health Insurance Subsidies

The ACA premium tax credit uses the broadest common definition: AGI plus tax-exempt interest, nontaxable Social Security benefits, and excluded foreign income. The credit is based on household income, which adds the MAGI of any dependents who are required to file a return.

Your credit depends on where that household income falls as a percentage of the federal poverty level (FPL). For 2026 coverage, the temporary rule that extended credits above 400% of FPL has expired, so a dollar of MAGI over that line can end the credit entirely. Withdrawals from a traditional 401(k) or IRA count, while qualified Roth withdrawals and spending from cash savings don’t.

Your advance credit is based on estimated income, and the final credit is reconciled against actual MAGI when you file. Before settling on a Roth conversion amount, run your plan through ProjectionLab’s Tax Strategy Compare matrix to see how much subsidy each conversion strategy gives up.

State Medicaid and Children’s Health Insurance Program (CHIP) eligibility also uses a MAGI-based income test built on the ACA definition, with some program-specific differences.

2026 MAGI Limits

The NIIT threshold is $125,000 for married couples filing separately. NIIT is 3.8% of the smaller of your net investment income or the amount your MAGI exceeds the threshold.

Modified Adjusted Gross Income Example

A married couple filing jointly has this income in 2026. One spouse is 66, on Medicare, and collecting Social Security. The other is 63, working part time, and buying coverage on the ACA marketplace.

Under the Social Security taxation formula, 85% of their $36,000 in benefits ($30,600) is taxable, leaving $5,400 untaxed. From the same return:

• ACA MAGI adds the $6,000 of municipal interest and the $5,400 of untaxed Social Security: $127,000.
• IRMAA MAGI adds only the municipal interest: $121,600. That’s below the $218,000 joint threshold, so this year’s return adds no surcharge to the older spouse’s premiums two years from now.
• Roth IRA MAGI removes the $30,000 conversion: $85,600. The couple is well under the $242,000 phase-out, and the part-time wages give them enough earned income to fund Roth contributions.

One return produces a $41,400 spread between the lowest and highest MAGI. The Roth conversion is the largest driver: it raises ACA and IRMAA MAGI by $30,000 while leaving Roth IRA MAGI untouched.

Frequently Asked Questions

Does MAGI include the standard deduction? No. MAGI is calculated from AGI, which comes before the standard or itemized deduction. Taking a larger deduction lowers your taxable income but leaves every version of MAGI unchanged.

Do 401(k) contributions reduce MAGI? Yes. Pre-tax 401(k) and 403(b) deferrals are left out of the wages in Box 1 of your W-2, so they never enter AGI, and no MAGI definition adds them back. They are still subject to FICA payroll taxes. Roth 401(k) contributions don’t reduce MAGI.

Does MAGI include capital gains? Yes. Short- and long-term capital gains are part of AGI, so they count toward every MAGI definition, including gains taxed at the 0% federal rate.

Does MAGI include Social Security? The taxable portion is always included, because it’s already in AGI. The untaxed portion is added back for ACA subsidies but not for IRMAA or Roth IRA eligibility. The untaxed share of your benefits, a form of non-taxable income, shrinks as your other income rises.

Where is MAGI on my tax return? Form 1040 has no MAGI line. Start from AGI on line 11a of the 2025 Form 1040 and add back what the relevant rule requires. For the ACA, Form 8962 has its own MAGI line (2a). For Roth IRA eligibility, IRS Publication 590-A includes a MAGI worksheet.

Are qualified Roth IRA withdrawals included in MAGI? No. Qualified Roth distributions aren’t taxable and aren’t added back under any common MAGI definition, which makes Roth savings useful for managing ACA and IRMAA thresholds in retirement.