FAQs about American Indian and Alaska Native Trust Income and MAGI
Q: What is Modified Adjusted Gross Income (MAGI)?
A: MAGI is your adjusted gross income, as determined for federal income tax purposes, with certain types of income added in and subtracted out.
Q: What is the purpose of MAGI?
A: MAGI is used to determine an individual’s eligibility for premium tax credits and cost sharing reductions for Qualified Health Plans purchased through the Health Insurance Marketplaces. MAGI is also used to determine eligibility for families and children coverage groups in Medicaid and the Children’s Health Insurance Program.
Q: Are there special rules for calculating MAGI for American Indians and Alaska Natives (AI/ANs)?
A: Yes. MAGI is based on taxable, adjustable gross income reported to the Internal Revenue Service (IRS). Because some types of income specific to AI/ANs are non-taxable, this income is excluded when determining eligibility for Marketplace tax credits, cost sharing reductions, Medicaid and CHIP. Certain types of AI/AN income are excluded when determining eligibility for Medicaid and CHIP, even though they might be taxable. This means that your MAGI might be slightly higher for the purposes of Marketplace assistance than it is for Medicaid eligibility.
Q: What types of AI/AN income are generally exempt from MAGI?
A: The following categories of income are generally excluded from an AI/AN’s MAGI:
- Distributions from Alaska Native Claims Settlement Act (ANCSA) Corporations and Settlement Trusts
- Distributions from trust/reservation property
- Income from property and rights related to hunting, fishing, and natural resources
- Income from the sale and use of cultural/subsistence property
- Student financial assistance provided by the Bureau of Indian Affairs and/or a Tribe
- Income that falls within the IRS General Welfare Doctrine
- Any other income that is non-taxable according to federal law or IRS guidance
Q: Is tribal gaming per capita payment excluded from MAGI?
A: No. Gaming per capita payments are taxable and must be included in MAGI.