Reviewed for accuracy on November 3, 2026 by Tina Price, one of Grove's licensed advisors.
What counts as income for the health insurance tax credit
The tax credit uses your household's modified adjusted gross income (MAGI) for the year you're covered. Most taxable income counts, plus all of your Social Security. Child support, gifts, SSI and veterans' disability payments don't.
Last updated November 3, 2026
The short version
- It's the income on your tax return, plus tax-free interest, all Social Security and excluded foreign income.
- Child support, gifts, SSI, veterans' disability and workers' compensation don't count.
- Alimony counts only for divorces finalized before January 1, 2019.
- If your income changes during the year, update Connect for Health Colorado.
What counts
Count everyone on your tax return, not just the people who need coverage.
- Wages, salary and tips.
- Self-employment and gig income, after business expenses.
- Unemployment compensation.
- All Social Security, including the part that isn't taxed.
- Retirement, pension and traditional IRA or 401(k) income.
- Interest (including tax-free interest), dividends, capital gains, rental and royalty income.
- Alimony from divorces or separations finalized before January 1, 2019.
What doesn't count
Leave these out of your estimate:
- Child support.
- Gifts.
- Supplemental Security Income (SSI).
- Veterans' disability payments.
- Workers' compensation.
- Alimony from divorces or separations finalized on or after January 1, 2019.
A dependent's income
Include a dependent's income only if they have to file a tax return. A teenager who files just to get withholding back doesn't count.
When income is hard to predict
Gig, seasonal, commission and self-employed income is hard to estimate. Base it on last year, recent months, and changes you know are coming.
Update Connect for Health Colorado when your income changes, so your credit stays close to right. The credit is settled when you file your taxes.
If you might end up over 400% of the poverty level, be careful. From tax year 2026, going over means repaying the whole advance credit.
Next step
Not sure what to count? A licensed Grove advisor can walk through your income with you, at no cost.
Want a person to check your pick? A licensed Grove advisor will, at no cost. If you make Grove your broker, you can keep calling the same advisor after you enroll.
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Common questions
Do I use last year's income?
No. Use your best estimate for the year you're getting coverage. Last year is a good starting point.
Does money from savings count?
No. Spending savings isn't income. Interest, dividends and taxable gains on investments do count.
Sources
- HealthCare.gov: what's included as income
- HealthCare.gov: how to estimate your expected income
- HealthCare.gov glossary: modified adjusted gross income (MAGI)
- IRS: Instructions for Form 8962 (household income, family size, employer coverage)
- IRS: repayment caps eliminated for excess advance premium tax credit (tax year 2026 and later)
This guide is general information, not tax or legal advice. Connect for Health Colorado decides eligibility and tax credits.