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American Indian and Alaska Native 

Trust Income and MAGI

Q: What is Modified Adjusted Gross Income (MAGI)?

A: MAGI is your adjusted gross income, as determined for federal 

income tax purposes, with certain types of income added in and 

subtracted out. 

Q: What is the purpose of MAGI?

A: MAGI is used to determine an individual’s eligibility for premium 

tax credits and cost sharing reductions for Qualified Health Plans 

purchased through the Health Insurance Marketplaces. MAGI is also 

used to determine eligibility for families and children coverage groups 

in Medicaid and the Children’s Health Insurance Program (CHIP). 

Q: Are there special rules for calculating MAGI for 

American Indians and Alaska Natives (AI/ANs)?

A: Yes. MAGI is based on taxable, adjusted gross income reported to 

the Internal Revenue Service (IRS). Because some types of income 

specific to AI/ANs are non-taxable, this income is excluded when 

determining eligibility for Marketplace tax credits, cost sharing 

reductions, Medicaid, and CHIP. Certain additional types of AI/AN 

income are excluded when determining eligibility for Medicaid and 

CHIP, even though they might be taxable. This means that your MAGI 

might be slightly higher for the purposes of Marketplace assistance 

than it is for Medicaid eligibility.

You may qualify for lower 

cost health insurance 

coverage on the Marketplace. 

When you provide your 

MAGI, you can find out if 

you’re eligible for premium 

tax credits and other savings 

that can lower the cost of 

health insurance.

Learn how MAGI works, the 

types of income counted and 

excluded, and the special 

rules for AI/ANs for the 

Marketplace, Medicaid, and 

CHIP.

Did you know?

Use of any information from this 

document is for general information 

only and does not represent 

personal tax advice, either express 

or implied. 

@CMSGov 

#CMSNativeHealth
@CMSGov #CMSNativeHealth

Q: What types of AI/AN income are generally 

exempt from MAGI?

A: The following categories of income are generally 

excluded from an AI/AN’s MAGI:

 Distributions from Alaska Native Claims 

Settlement Act (ANCSA) Corporations and 

Settlement Trusts

 Distributions from trust/reservation property

 Income from property and rights related to 

hunting, fishing, and natural resources

 Income from the sale and use of cultural/

subsistence property

 Student financial assistance provided by the 

Bureau of Indian Affairs and/or a Tribe

 Income that falls within the IRS General Welfare 

Doctrine

 Any other income that is non-taxable according to federal law or IRS guidance

You should contact your Tribe if you are unsure whether a certain type of income is exempt from MAGI. 

Q: Income exempt under the “General Welfare Doctrine” is excluded from MAGI. 

What is the General Welfare Doctrine?

A: Payments made under social benefit programs for the promotion of general welfare may be excluded from 

gross income under a concept known as the general welfare doctrine. This applies only to governmental 

payments out of a welfare fund based upon the recipient’s need, and not as compensation for services. 

When distributions to tribal members are made equal (per capita) and not based on need, then they do not 

fall under the general welfare doctrine. Benefits payable regardless of the financial status, health, educational 

background, or employment status of the recipient may be included in gross income of recipient.

Q: Is my tribal gaming per capita payment excluded from MAGI?

A: No. Gaming per capita payments are taxable and must be included in your MAGI.

Q: The list of AI/AN income includes distributions and payments from activities on trust 

property. Does that property have to be located on a reservation for the income to be 

excluded from MAGI?

A: No. This income is exempt from MAGI so long as it is derived from property that is held in trust by the 

federal government, subject to federal restrictions, located on an Indian reservation or within the most recent 

boundaries of a prior federal reservation, or otherwise under the supervision of the Secretary of the Interior.

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Q: How do I list AI/AN income on the application for Marketplace health insurance, 

Medicaid, and CHIP? 

A: When filling out an application for health insurance in the Marketplace, you will be asked to list your taxable 

income. You should provide the same income that you report to the IRS when you file your federal income tax. 

Do not include AI/AN income that the IRS exempts from taxation as part of your taxable income.

 In Appendix B of the Marketplace application, you will be asked to list certain types of AI/AN income that 

you previously included in Step 2 of your application. Even though this income is taxable, it still may be 

excluded from MAGI for the purposes of Medicaid and CHIP eligibility. You are asked to list this type of 

income on Appendix B to make sure that it is not counted toward your MAGI as part of the Medicaid and 

CHIP eligibility determination.

 If you don’t have these types of income, just put a zero on the application after the questions in Appendix 

B. If you do have this type of income, list what kind you have and how much of it you receive. 

 Do not list any per capita income from gaming in Appendix B, as it is taxable and included in MAGI. 

Q: Who should I contact for help when filling out the Marketplace application regarding 

my exempt AI/AN income?

A: You should contact your Tribe or the enrollment assister at your local Indian Health Service, tribe or tribal 

organization, or urban Indian organization. You can also check with a Navigator or the Help Desk at your 

State’s Marketplace or at Healthcare.gov. If someone helps you prepare your taxes, you can also ask them.

Specific Types of AI/AN 

Exempt Income

Below are some specific types of AI/AN income that may 

be excluded from your MAGI when determining eligibility 

for Medicaid, CHIP, and the tax credits and cost sharing 

reductions in the health insurance Marketplace. Please 

note that these are just examples and that this list is not 

exhaustive.

Distributions from ANCSA Corporations and 

settlements trusts 

 Cash distributions from an ANCSA corporation or 

settlement trust

 Stock or bonds issued by or acquired from an 

ANCSA Corporation

 A partnership interest distributed by an ANCSA 

Corporation, as well as subsequent partnership 

distributions

 Land or an interest in land (including land or 

an interest in land received from an ANCSA 

Corporation as a dividend or distribution on stock)

Per capita payments or distributions from trust/

reservation property

 Rents from any such lands and any structures on 

the land (housing, retail facilities, etc.)

 Royalties or other compensation received from 

oil and gas production, mineral extraction, timber 

harvesting, and similar activities

 Profits or revenues derived from economic activity 

on the land, such as the operation of motels, retail 

stores, gas stations, farms and ranches, etc.

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 Payments from funds held in trust by the Secretary 

of Interior for an Indian tribe, including interest and 

investment income accrued while such funds are 

held in trust and initial purchases made with such 

funds

Income derived from property and rights related to 

hunting, fishing, and natural resources

 Profits from the sale, lease, or harvest of mineral, 

timber, and other such resources

 Income derived from hunting, fishing, gathering, 

and harvesting fish, wildlife, and plant resources 

pursuant to federally protected rights, including 

off-reservation rights

Income from the sale and use of cultural or 

subsistence property 

 Earnings from ownership interests and usage 

rights to items that have unique religious, spiritual, 

traditional, or cultural significance that support 

subsistence or traditional lifestyle 

 Materials such as the sale of sage or sweetgrass 

for use in a healing or spiritual ceremony

 The sale of artwork, pottery, or jewelry with cultural 

or religious significance

 Crafts made by AI/ANs from fish and wildlife 

resources taken for personal or family 

consumption

 Proceeds of subsistence fish and game 

Student financial assistance provided by the Bureau 

of Indian Affairs 

 Student financial assistance provided under 

programs in Title IV of the Higher Education Act 

of 1965

 Grants from the Bureau of Indian Education’s 

Higher Education program

Payments that are exempt from federal income 

taxation under federal statute 

 Per capita shares distributed to Indians pursuant 

to the Indian Tribal Judgment Funds Use or 

Distribution Act (25 U.S.C. § 1401 et seq.), 

including interest and investment income earned 

on Judgment Funds while under administration

 Distributions from certain federal settlements, such 

as the Cobell v. Salazar class action settlement 

and some payments under the Keepseagle v. 

Vilsack settlement

Income excluded under the General Welfare Doctrine

 Housing assistance

 Education assistance

 Programs serving elders and individuals with 

disabilities

 Cultural and religious programs

 Transportation programs

 Disaster relief

 Payments used to help establish AI/AN-owned 

businesses on or near a reservation

Contact Info:

www.healthcare.gov/tribal

Questions? Give us a call

1-800-318-2596

TTY: 1-855-889-4325