A MAGI Budget Group Examples

These examples are divided into five groups based on taxpayer or tax dependent status and age:

·         Taxpayer Budget Group

·         Tax Dependent Under Age 19 Budget Group

·         Tax Dependent Age 19 or Older Budget Group

·         Not a Taxpayer or Tax Dependent (under age 19) Budget Group

·         Not a Taxpayer or Tax Dependent (age 19 or older) Budget Group

Each section includes budget group examples only for the person in the scenario that meets the rules for that section.  The location of any examples for other people in the scenario is listed at the end of the scenario. 

Taxpayer Budget Group Examples

1)    Married taxpayer filing a joint return

Mr. and Mrs. Smyth are married but recently separated, and are not living together.  They have two children.  Jesse is 15 years old and lives with his father.  Jamie is 8 years old and lives with her mother.  Mr. and Mrs. Smyth plan to file a joint tax return for the current year and claim both children as tax dependents.  (see Example #4 for Jesse’s and Jamie’s budget groups)

2)    Married taxpayer filing separate return

Mr. and Mrs. Jones are married and live together with their 5-year old child, Davy.  They plan to file separate tax returns this year.  Mrs. Jones will claim Davy as a tax dependent. (see Example #9 for Davy’s budget group)

3)    Unmarried taxpayer claiming dependents

Mr. Webster is divorced and lives alone.  He plans to file a tax return for the current year and will claim his 12-year old son, Daniel, as a tax dependent as allowed by the divorce decree.  Daniel lives with his mother in Colorado.

Tax Dependent Under Age 19 Budget Group Examples

4)    Tax dependent - Example 1

Mr. and Mrs. Smyth are married but recently separated, and are not living together.  They have two children.  Jesse is 15 years old and lives with his father.  Jamie is 8 years old and lives with her mother.  Mr. and Mrs. Smyth plan to file a joint tax return for the current year and claim both children as tax dependents.  (see Example #1 for the parents’ budget groups)

5)    Tax dependent - Example 2

Carrie Nation lives with her 2-year old son Bill and her 8-year old nephew Zane.  She plans to file a return for the current year and will claim both Bill and Zane as a tax dependent.  Carrie is only applying for Bill.  Zane already has coverage through the ALTCS program.

Tax Dependent Age 19 or Older Budget Group Example

6)    Tax dependent over age 19

Mrs. Pond, her 20-year old daughter Amy and Amy’s 1-year old son Rory live together.  Mrs. Pond plans to file a tax return for the current year and will claim her daughter Amy as a tax dependent.  Rory will be claimed by his father who lives in another state. (see Example #8 for Rory’s budget group)

Not a Taxpayer or Tax Dependent (under age 19) Budget Group Examples

The following provide examples of budget groups for people who are not taxpayers, are not claimed as a tax dependent, or ARE claimed as tax dependents but meet an exception from using tax dependent rules.

7)    Not a taxpayer or claimed as a tax dependent

Archie Andrews, age 17, lives with his mother Sara, his 21-year old brother Max, Max’s 2-year old daughter Angel, and his step-father Reggie.  No one in the home plans to file a tax return for the current year, and no one is claimed as a tax dependent by someone else.

8)    Lives with a parent, but claimed as a tax dependent by a non-custodial parent.

Mrs. Pond, her 20-year old daughter Amy and Amy’s 1-year old son Rory live together.  Mrs. Pond plans to file a tax return for the current year and will claim her daughter Amy as a tax dependent.  Rory will be claimed by his father who lives in another state.  (see Example #6 for Amy’s budget group)

9)    Claimed as a tax dependent by one parent, but living with more than one parent.

Mr. and Mrs. Jones are married and live together with their 5-year old child, Davy.  They plan to file separate tax returns this year.  Mrs. Jones will claim Davy as a tax dependent.  (see Example #2 for the parents’ budget groups)

10) Claimed as a tax dependent by someone other than a spouse or parent.

Mrs. Green lives with her 5-year old granddaughter Sophie.  Mrs. Green plans to file a tax return for the current year and will claim Sophie as a dependent.

Not a Taxpayer or Tax Dependent (age 19 or older) Budget Group Examples

11) Not a taxpayer or claimed as a tax dependent

Jonah and his girlfriend Helen are in their twenties.  They live together along with Helen’s 12-year old child Jasper.  No one plans to file a tax return for the current year, nor will they be claimed as dependents by someone else.

12) Claimed as a tax dependent by someone other than a spouse or parent.

Gladys is 63 years old and lives with her adult daughter Peggy.  Peggy plans to file a tax return for the current year, and will claim Gladys as a dependent.

13)  Pregnant Woman Budget Group

Sarah is pregnant and lives with her daughter Michelle