Does Social Security Count as Income for Marketplace Health Insurance in South Carolina?

Quick answers

Does Social Security count as income for Marketplace health insurance?

Yes. Both taxable and non-taxable Social Security count, and so does Social Security Disability Income (SSDI). Enter the full amount you expect for the year, before deductions like Medicare premiums or taxes. Supplemental Security Income (SSI) does not count.

What is MAGI for Marketplace health insurance?

MAGI, or modified adjusted gross income, is the number the Marketplace uses for savings. Start with the adjusted gross income on line 11 of your IRS Form 1040, then add untaxed foreign income, non-taxable Social Security benefits and tax-exempt interest.

Do I count my dependent's income on my Marketplace application?

Only if they're required to file a federal tax return because of how much they made. If a dependent files just to get a refund, don't count their income. Do include your spouse and anyone else in your household who is required to file.

What if my Social Security income changes during the year?

Update your Marketplace application as soon as possible. Your savings are based on expected income for the year you want coverage, so updating keeps them accurate and helps you avoid owing money back when you file your federal tax return. A licensed agent at The Jordan Insurance Agency can review this with you by phone or video.

In this episode

Learn how Social Security income is counted on your South Carolina Marketplace health insurance application, what to include, and common mistakes to avoid.

• Learn which Social Security payments count as income in South Carolina
• Find out how to report your income correctly on the Marketplace application
• Avoid common mistakes that could affect your health insurance savings

Source: Count income & household size (healthcare.gov)

Billy Jordan is a licensed insurance agent (NPN 8699876) with The Jordan Insurance Agency, based in Charlotte, North Carolina. Voices in this episode are AI-generated, including Billy's, from a script reviewed and approved by Billy Jordan, a licensed insurance agent. General education only, not advice for your specific situation.

Tanya (AI host): My Social Security check is most of my income—does it count when I apply for Marketplace health insurance in South Carolina? And if so, how do they count it? Stick around if you want to get this right on your application.

Tanya (AI host): Welcome to Smart Coverage. Real Advice., the insurance podcast from The Jordan Insurance Agency. I'm Tanya, your host, and I'm here with Billy Jordan, a licensed insurance agent and the president of The Jordan Insurance Agency.

Billy Jordan: Thanks, Tanya. Glad to be here—this is a really common question, and it’s a big one for folks looking at Marketplace coverage in South Carolina.

Tanya (AI host): So let’s get right to it. Does Social Security count as income when you apply for Marketplace health insurance?

Billy Jordan: Yes, it does—both taxable and non-taxable Social Security income count when you’re applying for Marketplace health insurance. According to healthcare.gov, you need to include the full amount of your Social Security benefits, before anything gets taken out, when you estimate your yearly income for the Marketplace.

Tanya (AI host): What about Social Security Disability? Does that get counted too?

Billy Jordan: Yes. Social Security Disability Income, or SSDI, is also included. You need to include both Social Security and SSDI when estimating your income for the Marketplace.

Tanya (AI host): So just to clarify, you said both taxable and non-taxable Social Security count. Are there any Social Security payments that don’t count?

Billy Jordan: The one that doesn’t count is Supplemental Security Income, or SSI. That’s a different program and, according to healthcare.gov, you do not include SSI when you estimate your Marketplace income. But for regular Social Security and SSDI, you do include the full amount.

Tanya (AI host): That clears it up. Now, when you fill out the Marketplace application, what do you actually put down for your Social Security income?

Billy Jordan: You’ll enter the total amount of Social Security you expect to get for the year—before any deductions for things like Medicare premiums or taxes. The Marketplace bases your savings on your expected household income for the year you want coverage, not last year’s income.

Tanya (AI host): So if your Social Security goes up during the year, or you start getting it partway through, what should you do?

Billy Jordan: If your income changes, you should update your Marketplace application as soon as possible. That way, your savings can be adjusted and you won’t accidentally owe money back at tax time.

Tanya (AI host): What about people who have other income besides Social Security—like a part-time job or a small pension? Does the Marketplace count all of that together?

Billy Jordan: Yes, the Marketplace adds up all your income types. That includes wages from a job, pensions, retirement account withdrawals, rental income, investment income, and Social Security. The Marketplace uses a number called modified adjusted gross income, or MAGI. MAGI is your adjusted gross income plus untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest.

Tanya (AI host): You mentioned MAGI. Can you break that down a little more? How do people actually figure out what their MAGI is?

Billy Jordan: You start with your adjusted gross income, which is on line eleven of your IRS Form 1040. Then you add in untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest. For many people, their MAGI is the same as or very close to their adjusted gross income, but if you have any of those extra sources, you need to add them in.

Tanya (AI host): Can you give us a real-world example of how someone in South Carolina might figure this out?

Billy Jordan: Let’s say you get eighteen thousand dollars a year from Social Security, and that’s all you have. You’d enter the full eighteen thousand as your expected income on the Marketplace application. If you also have a part-time job making six thousand dollars a year, you’d add that in, so your total estimated income would be twenty-four thousand for the year.

Tanya (AI host): What’s a common mistake people make with Social Security and Marketplace applications?

Billy Jordan: The most common mistake is leaving out Social Security income, especially non-taxable amounts. Some folks think if they don’t pay taxes on it, it doesn’t count—but for the Marketplace, it does.

Tanya (AI host): Does it matter if you’re the only one in your household on Social Security, or do you add up everyone’s income?

Billy Jordan: You include the income of everyone in your household who’s required to file a tax return. That means your spouse’s income, and any dependents’ income if they have to file. The Marketplace counts estimated income of all household members.

Tanya (AI host): What about dependents who work summer jobs or have small part-time jobs? Should their income be included?

Billy Jordan: According to healthcare.gov, you only count a dependent’s income if they’re required to file a federal tax return because of how much they made. If they file just to get a refund and didn’t really need to, you don’t count their income.

Tanya (AI host): If your income is hard to predict—like if you work part-time or your Social Security starts or stops—how should you handle that on your application?

Billy Jordan: You should make your best estimate for your yearly income, based on what you expect for the year you want coverage. If things change, you can update your Marketplace application at any time. This way, you qualify for the right amount of savings and avoid owing money back when you file your federal tax return.

Tanya (AI host): Three things to remember. One, both taxable and non-taxable Social Security count as income for Marketplace savings. Two, always include the full amount before deductions, and update your application if your income changes. Three, only count your dependents’ income if they have to file a tax return.

Tanya (AI host): For a personalized look at your situation, book a free thirty-minute chat with Billy and his team at thejordaninsuranceagency.com/podcast.

Billy Jordan: I'm Billy Jordan with The Jordan Insurance Agency. Until next time, take care.

Tanya (AI host): Thanks for listening to Smart Coverage. Real Advice. from The Jordan Insurance Agency.