What Counts as Income for Marketplace Health Insurance in North Carolina? MAGI Explained Simply

Learn what counts as income for Marketplace health insurance in North Carolina, including MAGI basics, what to include, and what to leave out. Avoid costly mistakes when applying for subsidies.

In this episode

• Understand what income the Marketplace counts for North Carolina ACA plans
• Learn which sources like Social Security and self-employment are included
• Find out what not to report, like child support, SSI, and gifts

Read the full guide: What Is Considered Income for Marketplace Insurance? Complete ACA & MAGI Guide

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): I keep hearing about “modified adjusted gross income” for Marketplace health insurance—what actually counts as income, and what doesn’t? If you get this wrong, you could end up owing money at tax time, so let’s break it down.

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. It’s always good to be here. This is a big topic—understanding what counts as income for Marketplace insurance, especially in North Carolina, really makes all the difference when you’re applying for subsidies or trying to avoid surprises at tax time.

Tanya (AI host): So let’s get right to it. What actually counts as income for Marketplace health insurance in North Carolina?

Billy Jordan: The Marketplace uses something called Modified Adjusted Gross Income, or MAGI. That’s your IRS Adjusted Gross Income—so all your taxable earnings—plus a few extra things: non-taxable Social Security benefits, tax-exempt interest, and any excluded foreign income. Basically, if it shows up on your federal tax return, it probably counts. This applies to everyone in your household who’s required to file a tax return.

Tanya (AI host): Okay, so it’s not just your paycheck. Can you give me some real examples of what’s included?

Billy Jordan: Sure. W-2 wages, net self-employment income after business deductions, taxable interest, dividends, capital gains, pensions, and all Social Security benefits—even the non-taxable part—are counted. For example, if you’re retired and getting Social Security, you count the whole benefit, not just the taxable portion.

Tanya (AI host): Wait, even the non-taxable Social Security? That trips a lot of people up, right?

Billy Jordan: It really does. People think if it’s not taxed, it doesn’t count, but for the Marketplace, every dollar of Social Security—retirement or disability—gets added in. A common mistake is leaving out non-taxable Social Security, which can lead to bigger tax bills later.

Tanya (AI host): Got it. Now, what about money that does NOT count as income for the Marketplace?

Billy Jordan: Good question. There’s a list of things you don’t have to include. Child support payments, non-taxable gifts, inheritances, Supplemental Security Income—which is SSI, not Social Security Disability Insurance—and life insurance payouts are all excluded. If you get food stamps, cash assistance, or federal disaster relief, those don’t count either.

Tanya (AI host): So, if my aunt gives me some money as a gift, or I get child support, I just leave those off my application?

Billy Jordan: Exactly. Don’t enter them. Reporting those can actually hurt you by making your income look higher than it really is, which could lower your premium tax credits or cost-sharing help.

Tanya (AI host): What about self-employed folks or gig workers in North Carolina? How do they figure out what to enter?

Billy Jordan: For self-employed or gig workers, you use your net business profit—not your gross. Take your estimated total revenue for the year, subtract all allowed business expenses from Schedule C, and that’s the number you report. You can also deduct things like self-employed health insurance premiums, half your self-employment tax, qualified retirement contributions, and HSA contributions. The goal is to get as close as possible to what will show up on your tax return.

Tanya (AI host): So if someone just enters their gross 1099 income, they could be missing out?

Billy Jordan: Exactly. That’s a really common mistake. Entering gross income instead of net can make your income look much higher, so you might not get the help you should. Always deduct your business expenses first.

Tanya (AI host): Let’s talk about dependents. If my teenager works a summer job, does their income count toward our family’s Marketplace calculation?

Billy Jordan: It depends on the IRS filing rules. If your dependent earns less than the filing threshold for single dependents, their income doesn’t count, even if they file a tax return just to get a refund. But if they earn enough that the IRS requires them to file, then their full MAGI is added to the household total.

Tanya (AI host): That’s helpful. So, just because your kid files a tax return doesn’t mean you automatically include their income?

Billy Jordan: Right. Only include it if the law requires them to file. It’s another spot where people sometimes add too much and lose out on benefits.

Tanya (AI host): What happens if I guess my income wrong on the application—say I earn more or less than I thought I would?

Billy Jordan: The Marketplace uses your best estimate for the year, but everything gets reconciled on your taxes with IRS Form 8962. If you estimated too high, you might get extra tax credits back as a refund. If you estimated too low and got too much help, you’ll have to pay some or all of it back at tax time. For tax year twenty twenty-six, the old repayment caps are gone—so if you got too much in advance credits, you’ll repay the whole extra amount, no matter your income level.

Tanya (AI host): So it’s even more important now to get your estimate as close as possible?

Billy Jordan: Absolutely. And if your income changes during the year—like a new job, loss of income, or retirement—you need to report it within thirty days. That way, your subsidies can adjust, and you’re less likely to owe money later.

Tanya (AI host): If someone is self-employed and the Marketplace asks for proof of income, what kind of documents do they need?

Billy Jordan: The exchange can issue what’s called a Data Matching Issue if your estimate and their records don’t match. To clear it, you might need to upload your most recent Schedule C, 1099 forms, quarterly profit and loss statements, or business bank statements. Keeping those records organized can help you avoid losing your subsidy mid-year.

Tanya (AI host): Three things to remember. One, Marketplace income is your Adjusted Gross Income plus non-taxable Social Security, tax-exempt interest, and excluded foreign income. Two, don’t report child support, SSI, gifts, or life insurance payouts as income. Three, self-employed folks should use net profit after expenses and update income if anything major changes during the year.

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.