Is Social Security Included in Income for Obamacare?

The government’s definition of family income for Obamacare, or MAGI (Modified Adjust Gross Income), what goes into it and what does not, would be impractical to address in one article.

My clients frequently asked about Social Security. Does it count as family income in your Modified Adjusted Gross income or does it not? And, of course, the answer is ‘it depends’.

What it depends on is the type of federal program you are talking about. Although, you will include in your Modified Adjusted Gross Income any type of Social Security payments. Social Security taxes are what fund this. Those would also include:

  • Retirement income:  Income paid to you in retirement if you have enough Social Security credits built up
  • Survivor benefits:     Benefits paid to your (qualified) survivors, which based on your record
  • Disability benefits:    Benefits paid to you or your dependents (s) based on a severe medical impairment (those paid monthly and any lump sum you receive after approval of Disability Benefits).

Do not include Supplemental Security Income or SSI. Please note, SSI does not mean Social Security Income. SSI means supplemental security Income. Supplemental Security Income is for those who have little or no income at all. Usually, they are elderly, disabled or blind. This program helps meet basic needs like food, clothing as well as shelter. SSI uses general tax revenues from a Federal government program. Therefore these taxes are not collected for Social Security.

There are many exceptions as well as variances to the above situations. We expect this from any complicated government program. The key is that MAGI can include income received. In addition, aid received from Supplemental Security Income can be excluded in MAGI.