Quick Answer: AGI (line 11, Form 1040) is gross income minus deductions like IRA contributions, student loan interest, and self-employment tax. MAGI for health coverage adds three items back: tax-exempt interest income, excluded foreign income, and the non-taxable portion of Social Security benefits. Most households see no difference between the two numbers. Where it matters: [Medicaid income limits](/medicaid-income-limits) use MAGI capped at 138% of the [federal poverty level](/federal-poverty-level) ($22,025 individual in 2026), and [ACA income limits](/aca-income-limits) for premium tax credits run from 100% to 400% FPL ($15,060 to $62,600 for one person in 2026).
MAGI vs AGI: What Gets Added Back
The premium tax credit and most Medicaid categories both rely on MAGI. Per IRS Publication 974, three items can make MAGI higher than AGI: (1) tax-exempt interest such as municipal bond income, which does not appear in AGI but is added back for MAGI; (2) the non-taxable portion of Social Security benefits, since only the taxable portion sits in AGI; (3) excluded foreign income under IRC Section 911. For W-2 workers with no investment income and no Social Security, MAGI and AGI are identical. If you are near the Medicaid threshold, see whether you qualify for Medicaid with no income or with a job for how your MAGI interacts with state eligibility rules.
MAGI vs AGI comparison chart (2026)| Item | In AGI? | In MAGI? |
|---|
| Wages, self-employment income | Yes | Yes |
| Taxable Social Security benefits | Yes | Yes |
| Non-taxable Social Security benefits | No | Added back |
| Municipal bond (tax-exempt) interest | No | Added back |
| Excluded foreign income (IRC 911) | No | Added back |
Source: IRS Publication 974 (2026); HealthCare.gov MAGI income definition.
Source: https://www.irs.gov/publications/p974
Frequently Asked Questions
Is MAGI the same as AGI for most people?
Yes. For most wage earners, MAGI equals AGI because the add-backs (non-taxable Social Security, tax-exempt interest, foreign income exclusions) are zero. If you collect Social Security and hold municipal bonds, expect MAGI to run slightly higher than your Form 1040 line 11 AGI figure.
What income threshold does Medicaid use in 2026?
Most Medicaid categories for non-elderly adults use MAGI capped at 138% of the federal poverty level: $22,025 for a household of 1 in 2026, $29,969 for a household of 2. Some aged, blind, or disabled categories use SSI methodology with asset tests instead of MAGI.
Does the ACA subsidy cliff still apply in 2026?
Yes. The enhanced premium tax credits from the American Rescue Plan Act expired January 1, 2026. For 2026 Marketplace plans, the subsidy cliff is back: MAGI above 400% FPL ($62,600 individual) disqualifies you from any premium tax credit. Check [ACA income limits](/aca-income-limits) for full household-size thresholds.
