Manual Income Calculations with Deductions

For both pre-tax and deductions that are adjustments to income:

Enter in gross wages, and

Use available selections within the eligibility system to enter deductions

Only enter deductions allowable under MAGI guidelines

The eligibility system will subtract the deductions from the gross income If circumstances require a manual calculation of deductions, include notes to explain all manual calculations.

Although the eligibility system calculates the income after subtracting deductions, it is necessary to understand how to manually calculate income with deductions.

EXAMPLE : Jan is employed and is paid semi-monthly (twice per month) a salaried amount of $1,716.00. Jan’s pre-tax deductions were not RC with the electronic sources. She provided her pay stubs to verify her pre-tax deductions which include: health, vision, and dental insurance for herself, her spouse and children, and contributions to her deferred compensation plan. Jan does not claim any other deductions. To calculate Jan’s MAGI income, convert her income and deductions into monthly amounts and then subtract her deductions from her gross pay. Review Jan’s pay stub below to identify her gross pay and pre-tax deductions.

Convert Jan’s income to reflect her monthly gross salary. $1,716.00 x 2 = $3,432.00

Convert Jan’s pre-tax deductions to monthly amounts. Dental Insurance $43.94 x 2 = $87.88 Health Insurance $44.50 x 2 = $89.00 Vision Insurance $7.89 x 2 = 15.78 Medical Cafeteria Plan $75.00 x 2 = $150.00 Deferred Comp Contribution $37.50 x 2 = $75.00 Total Monthly Deductions = $417.66

Outcome: Jan’s household MAGI income, after pre-tax deductions, is $3,014.34 ($3,432.00 – $417.66 = $3,014.34)

EXAMPLE : Jon applies for MAGI Family MO HealthNet (MHN) for his 8-year-old daughter, Hazel, who he expects to claim as a dependent. Jon is an elementary school teacher. His monthly gross income is $2,250. He spent $240 on supplies for his classroom (Educator Expense Deduction) in the taxable year. Hazel’s MAGI-based household size is herself and her father, Jon. To manually calculate Jon’s income, and Hazel’s MAGI household income, divide the Educator Expense by 12 months ($240 / 12 = $20), and subtract that amount from the MAGI household income ($2,250 – $20 = $2,230). The monthly MAGI household income is $2,230.