To determine who to include in each person's income standard, or Eligibility Determination Group (EDG), we must use either Tax Filer or Relationship rules. The decision to use tax filer rules is based on the applicant or recipient's response to questions concerning whether they:
- plan to file taxes for the current tax year,
- whether they will file taxes jointly with a spouse,
- whether they will claim dependents, or
- will be claimed as a dependent on someone else's tax return.
Relationship rules will apply if the person will not file taxes or be claimed as a tax dependent, or does not know whether they will file taxes or be claimed as a dependent, or meets one of the exceptions to the tax filer rules described below in the "3 Step Process" table.
NOTE: For pregnant women, count the number of babies expected toward any EDG in which the pregnant woman is counted.
Tax Filer or Relationship Rules? - 3 Step Process
Each EDG is formed around an individual. For each individual apply the following rules in order from Step 1 to Step 3, stopping at the first rule that applies to the individual:
Does individual expect to file taxes and NOT be claimed as a dependent of someone else?
Is individual expected to be claimed as a tax dependent?
|Step 3 Individual will not file taxes or be claimed as a tax dependent, or is a tax dependent who meets one of the exceptions in Step 2, or tax filing status is unknown.
If yes, apply Tax Filer Rule
- all their claimed dependents
- spouse if living with tax payer
|If yes, apply Tax Filer Rule unless one of the following exceptions apply:
- Individual is claimed as dependent by someone who is not their parent/step-parent.
- Individual is a child under 19 living with both parents (includes stepparent). One parent expects to claim the child and parents do not expect to file a joint return.
- Individual is a child under 19 who is claimed as a tax dependent by a non-custodial parent.
Apply Relationship Rule
EDG includes Individual + if living with individual:
- individual's children/step-children under age 19.
- For children under 19, their parents/stepparents + siblings/step siblings under 19
|STOP if individual fits this profile, otherwise go to step 2.
If one of the exceptions apply go to Step 3, otherwise, under Tax Filer Rule:
EDG = EDG of tax payer claiming this tax dependent.
MAGI Budgeting and the Health Insurance Marketplace
Eligibility determinations for financial assistance to buy insurance on the Health Insurance Marketplace are also based on MAGI methodology. However, the Marketplace uses only tax filer rules to determine the household size. Relationship rules are not used by the Marketplace. This is because the financial help is in the form of tax credits, so only tax filers can receive the benefits.