When you fill out a Health Insurance application, you’ll need to estimate your expected income. Two important things you should know are:
Marketplace savings are based on your expected household income for the year you want coverage, not last year’s income.
Income is counted for you, your spouse, and everyone you’ll claim as a tax dependent on your federal tax return (if the dependents are required to file). Include their income even if they don’t need health coverage.
How to make an estimate of your expected income
Step 1. Start with your household’s adjusted gross income (AGI) from your most recent federal income tax return.
You’ll find your AGI on line 7 of IRS Form 1040.
Don’t have recent AGI? See another way to estimate your income.
Step 2. Add the following kinds of income, if you have any, to your AGI:
- Tax-exempt foreign income
- Tax-exempt Social Security benefits (including tier 1 railroad retirement benefits)
- Tax-exempt interest
Don’t include Supplemental Security Income (SSI).
Step 3. Adjust your estimate for any changes you expect
Consider things like these for all members of your household:
- Expected raises
- New jobs or other employment changes, including changes to work schedule or self-employment income
- Changes to income from other sources, like Social Security or investments
- Changes in your household, like gaining or losing dependents. Gaining or losing a dependent can have a big impact on your savings.
Now you have an estimate of your expected income.
Estimating unpredictable income
It’s hard to predict your income if you’re unemployed, self-employed, on commission, or on a work schedule that changes regularly.
If your income is hard to predict, base your estimate on your past experience, recent trends, what you know about possible changes at your workplace, and similar information. If the job is new to you, ask people in the same field or in the same company about their experiences.