Understanding the Affordable Care Act: How MassHealth Counts Income After Jan. 1, 2014

Vicky Pulos

This updated paper from MLRI describes changes in the methodology for determining income that were enacted as part of national health reform and how they will be implemented in MassHealth starting Jan. 1, 2014. The new tax-based methodology will affect most people on MassHealth except those eligible based on being age 65 or older or the need for institutional care. The paper includes flow charts showing how to "build" a household under the MAGI rules.

May 2018 UPDATE

  • The IRS recognized an exception to the requirement that a married person file jointly in order to qualify for a premium tax credit. A spouse who is unable to file jointly due to abuse or abandonment by the other spouse may still qualify for a premium tax credit. 26 CFR 1.36B-2T (2014).
  • The Tax Cuts and Jobs Act of 2017 (TCJA) reduces the personal exemption deduction to $0 in 2018-2025 but does not eliminate personal exemptions. TCJA also affects three “above the line” deductions used to calculated Adjusted Gross Income: it allows the tuition and fees deduction to expire, it restricts the moving expense deduction to active duty military and it ends the deduction for alimony in orders entered after Dec. 31, 2018. Pub.L. 115-97 (Dec. 22, 1917).
  • All dollar amounts in this 2014 paper, such as the explanation of the applicable income thresholds that determine when a child has to file a return  have changed since this paper was written. Consult IRS.gov or other sources for current amounts.


The IRS has redesigned Form 1040 for 2018. References in this paper to lines on the Form 1040 for 2014-2017 are no longer correct for the Form 1040 in 2018.  AGI is now on line 7 of the redesigned Form 1040 not line 37 (there is no line 37). Various additions and adjustment used to calculate AGI are now in a new Schedule 1 rather than on Form 1040. 

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Understanding ACA MAGI 3-14-2014 rev.pdf (179.45 KB) 179.45 KB