Modified Adjusted Gross Income - MAGI (EA Exam)
Modified Adjusted Gross Income (MAGI) is AGI with certain deductions and exclusions added back. The specific add-backs vary by tax provision. MAGI is used to determine Roth IRA eligibility, premium tax credit, Medicare surcharges, passive activity loss limits, and education credit phase-outs.
Exam Tip
MAGI = AGI + specific add-backs (varies by provision). No single formula. Key thresholds: Roth IRA, PTC, NIIT ($200K/$250K), Medicare surcharges. Starts with 2025 AGI Line 11a.
EA exam baseline: For the 2026–2027 SEE, use Tax Year 2025 and federal tax law through December 31, 2025. Later-year amounts below are explicitly labeled comparisons, not the default exam year. IRS SEE policy.
What is MAGI?
MAGI starts with AGI and adds back specific items depending on which tax provision is being evaluated. There is no single MAGI formula -- each provision defines its own version.
Provision-Specific Adjustments
| Provision | Examples of Adjustments to AGI |
|---|---|
| Roth IRA contributions | Subtract Roth conversion/qualified-plan-to-Roth rollover income; add back IRA and student loan interest deductions, foreign income/housing exclusions, savings bond interest exclusion, and adoption assistance exclusion |
| AOTC/LLC | Add back foreign earned income and housing exclusions/deduction and applicable American Samoa or Puerto Rico income exclusions |
| Premium tax credit | Add tax-exempt interest, nontaxable Social Security, and excluded foreign income; household income may include required-filing dependents |
| Medicare income-related surcharges | Generally AGI plus tax-exempt interest, using a prior-year return |
| Rental real estate special allowance | Use the provision-specific modified AGI calculation, including adding back passive activity losses |
Key MAGI Thresholds (2025)
| Provision | Single | MFJ |
|---|---|---|
| Roth IRA contribution | $150,000-$165,000 | $236,000-$246,000 |
| Premium Tax Credit | 2025 enhanced rules: no 400%-FPL ceiling | 2025 enhanced rules: no 400%-FPL ceiling |
| NIIT (3.8%) | $200,000 | $250,000 |
| Additional Medicare Tax (0.9%) | $200,000 | $250,000 |
| 2025 Medicare Part B/D surcharge (generally 2023 income) | $106,000 | $212,000 |
Exam Alert
MAGI definition varies by provision -- there is NO single formula. For the EA exam, know which items are added back for each provision. Most common: Roth IRA eligibility, PTC, NIIT, and Medicare surcharges. MAGI always starts with AGI from Line 11a of the 2025 Form 1040.
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Adjusted Gross Income (AGI)
Adjusted Gross Income (AGI) is gross income minus above-the-line deductions (adjustments to income). AGI is the key threshold used to determine eligibility for many tax credits, deductions, and phase-outs on Form 1040.
Earned Income Tax Credit (EITC)
The Earned Income Tax Credit (EITC/EIC) is a refundable tax credit for low-to-moderate income workers. The maximum credit for 2025 is $8,046 with 3+ qualifying children. Taxpayers must have earned income, a valid SSN, and investment income no more than $11,950.
Education Credits (AOTC and LLC)
Education credits reduce tax for qualified education expenses. The American Opportunity Tax Credit (AOTC) provides up to $2,500 for the first 4 years of college (40% refundable). The Lifetime Learning Credit (LLC) provides up to $2,000 with no limit on years and is non-refundable. You cannot claim both for the same student in the same year.
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