If in 15% tax bracket, do capital gains count for ACA MAGI?

[ctmm]

My apologies if this has been discussed before, I've been searching through threads and haven't been able to find this answer. In ER, DH and I will be in the 15% tax bracket, so my understanding is for income tax purposes, capital gains will be taxed at 0%.

My question is, will the capital gains count for the ACA MAGI for subsidy calculation? I'm actually hoping that they will, since our income without capital gains might be too low to qualify for subsidized Exchange insurance and put us in Medicaid which I don't know enough about to be comfortable with yet.

I have found out from reading the board that I can use Roth conversions to tweak our MAGI if needed, but finding out about how capital gains are treated would be very helpful. Thanks!

 

[fosterscik]

It's important to note these facts:
"I often read in the financial press that taxpayers will pay no capital gains taxes if taxable income does not exceed the upper limit of the 15% tax bracket, which will be $73,800 in 2014 for joint returns and $36,900 for single returns. While this is correct, it omits the fact that those capital gains will be added to your taxable income, possibly pushing some or all of your gains out of the zero capital gains tax bracket."
and
"Let's say that Joe has $93,800 of combined annuity income, traditional IRA distributions, interest, and dividends and $20,000 of exemptions and deductions. His taxable income before selling stocks will be $73,800. Should Joe sell stocks with a long term capital gain of $10,000, all of the gain will be taxed at 15%, not zero. That's because his other $73,800 of taxable income has already pushed him out of the zero percent tax bracket before the capital gains are added."
and
"Retirees receiving Social Security benefits should also be aware that increasing AGI by selling capital assets for a gain might trigger or increase taxes on Social Security benefits. You may pay no Federal capital gains tax on the stock sale only to see your Social Security taxes increase."
See:
The Retirement Cafe: Zero Capital Gains Tax

 

[MichaelB]

My question is, will the capital gains count for the ACA MAGI for subsidy calculation? I'm actually hoping that they will, since our income without capital gains might be too low to qualify for subsidized Exchange insurance and put us in Medicaid which I don't know enough about to be comfortable with yet.

Yes. Capital gains are counted as income for calculating PPACA premium assistance and subsidies. See page 6 here http://www.ncsl.org/documents/health/defincacamedicdprov.pdf

The Definition of Income Under PPACA In Section 2002(a) and Section 1401(a) of PPACA, household income is defined to be MAGI in compliance with the Internal Revenue Code (IRC). Specifically, gross income is total income minus certain exclusions (e.g., public assistance payments, employer contributions to health insurance payments). From gross income, adjusted gross income (AGI) is calculated to reflect a number of deductions, including trade and business deductions, losses from sale of property, and alimony payments. MAGI is defined as AGI plus certain foreign earned income and tax-exempt interest

 

[grasshopper]

Long term capital gains if you are in 15% tax bracket, short term capital gains are ordinary income. Either is included in AGI.