Skip to main content

ICHRA & QSEHRA: How to calculate household income for eligibility and tax credit checks

This article is for employees and employers using Take Command Health to evaluate eligibility for ICHRA or QSEHRA and determine household income for Marketplace and tax credit purposes.

Written by Support

Household income for HRA-related eligibility is the total expected annual income (MAGI-based estimate) of everyone in your tax household, used to determine eligibility for premium tax credits and affordability calculations.

This number must reflect your expected income for the current coverage year, not past income.

What is MAGI and why does it matter?

Household income is generally based on Modified Adjusted Gross Income (MAGI).

MAGI starts with taxable income and may include:

  • Untaxed foreign income

  • Non-taxable Social Security benefits

  • Tax-exempt interest

MAGI is used to determine:

  • Premium tax credit eligibility

  • Marketplace subsidy amounts

  • Income-based affordability assessments for HRAs

ACA / Marketplace Household Income Rules

Topic

ACA / Marketplace Rule

Who is counted

Tax filer + spouse (if filing jointly) + tax dependents

Roommates

Not included unless claimed as a tax dependent

Income measure

Modified Adjusted Gross Income (MAGI)

Age rule

No age requirement — depends on federal tax household status

Basis

Federal tax law and ACA Marketplace eligibility rules

Source: The Marketplace household generally includes the tax filer, spouse (if applicable), and tax dependents. (HealthCare.gov)

When do I need to calculate household income?

You must estimate household income when:

  1. Applying for Marketplace health insurance with potential tax credits

  2. Evaluating eligibility for premium tax credits alongside an ICHRA or QSEHRA

  3. Completing Take Command Health onboarding or income verification steps

  4. Updating income during the plan year due to job or household changes

If you are not applying for subsidies or eligibility checks, household income entry is not required.

What income should be included?

Include all expected annual income for every member of your tax household:

  1. Wages, salaries, and tips (before tax)

  2. Self-employment income (after business expenses)

  3. Unemployment compensation

  4. Social Security income (taxable and non-taxable portions)

  5. Retirement income (401k, IRA withdrawals, pensions)

  6. Investment income (interest, dividends, capital gains)

  7. Rental and royalty income

  8. Other taxable income reported on your federal return

What income should NOT be included?

Do NOT include:

  1. Child support payments

  2. Gifts or loans

  3. Supplemental Security Income (SSI)

  4. Veterans’ disability benefits

  5. Tax refunds or Child Tax Credit payments

  6. Non-taxable grants or reimbursements not considered income

If income is not taxable or not required to be reported on a federal return, it is typically excluded.

How do I calculate household income step-by-step?

  1. Identify everyone in your tax household

  2. Estimate each person’s expected annual income

  3. Include all taxable income sources for each person

  4. Add all individual incomes together

  5. Adjust for expected changes during the year (job changes, raises, unemployment)

  6. Use the total as your household income estimate

If income varies month to month, convert:

  • Hourly pay → hourly rate × hours/week × weeks/year

  • Part-time work → estimate average monthly earnings × 12
    ​

References

  • Health Insurance Marketplace Household Size Rules (HealthCare.gov) (HealthCare.gov)

  • HealthCare.gov – “What’s included as income” (MAGI guidance) (HealthCare.gov)

Did this answer your question?