Does My Deceased Spouse's Income Count for ACA Marketplace Health Insurance?

Losing a spouse brings an overwhelming number of financial and insurance decisions at exactly the moment when making decisions is the last thing you want to do. Among the questions that come up, one is especially confusing:

“My spouse passed away during the year. Do I still have to count the income they earned before they died when I apply for Marketplace health insurance?”

In most cases, yes. If your spouse passed away during the current tax year, the income they earned before their death generally does not simply disappear from the household’s annual income calculation. That can create an unusual and genuinely unfair-feeling situation: your current monthly income is dramatically lower, but your annual household income for Marketplace purposes is still relatively high.

Here’s what surviving spouses need to understand.

Does a deceased spouse’s income count toward Marketplace income?

Generally, yes.

For federal tax purposes, if your spouse dies during the year and you do not remarry before the end of that year, the IRS generally considers you married for the entire year for filing-status purposes, and you may generally file a joint return with your deceased spouse for the year of death. The IRS also specifically states that on a final joint return, income attributable to the deceased spouse through the date of death and the surviving spouse’s income for the year are included.

That matters because eligibility for financial assistance through the Health Insurance Marketplace is based on your estimated annual household Modified Adjusted Gross Income (MAGI) — an annual figure, not a monthly one.

So imagine a husband passed away in August 2026. Before his death, he earned $90,000 between January and August. His wife earned roughly $10,000 during the year. She may now be living primarily on a survivor pension and Social Security, with considerably less money coming into the household each month.

It would be natural to look at her current income and conclude, “she only makes about $10,000 a year now, so let’s use that.” Unfortunately, that isn’t how the annual Marketplace calculation works. His income earned before his death may still be part of the household’s 2026 income.

What income should a surviving spouse include?

When estimating Marketplace income for the year in which a spouse died, you may need to account for:

• Income the deceased spouse received before death
• The surviving spouse’s income for the entire year
• Pension or retirement income
• Social Security income
• Investment income
• Self-employment income
• Other income included in the ACA’s MAGI calculation

Marketplace MAGI starts with Adjusted Gross Income and adds certain items back, including nontaxable Social Security benefits, tax-exempt interest, and excluded foreign income. Supplemental Security Income (SSI) is not included.

This is one reason estimating ACA income becomes more complicated than simply looking at a paycheck. Our answer page on what income counts for ACA subsidies walks through the categories in more detail.

“But my income is much lower now. Why does his old income matter?”

This is the most frustrating part for surviving spouses, and it deserves a plain answer: the Marketplace isn’t looking only at what you’re bringing in this month. Premium tax credits are ultimately tied to annual household income.

So a year can look like this:

• January–August: a two-income household with substantial earnings.
• August: your spouse passes away.
• September–December: you have very little earned income.

Financially, your life has changed enormously. But when estimating the household’s income for that entire tax year, the income received earlier in the year may still count. That can mean a smaller Marketplace subsidy — or potentially none — for the remaining months of that year, depending on the complete household and tax picture.

It is worth naming clearly: this is not a mistake on your part, and it is not something you did wrong. It’s a consequence of a calculation built around calendar-year totals.

The following year can look completely different

This distinction is extremely important, and it’s the part that gives most surviving spouses real relief.

Suppose a spouse dies in August 2026. For 2026, the household may still show substantial income because of what was earned before the death. But for 2027, you are not going to add your late spouse’s 2026 wages to your 2027 income. Instead, you’d estimate your own expected 2027 household income, which might consist of:

• Employment income
• Survivor pension benefits
• Social Security benefits
• Retirement distributions
• Investment income
• Other applicable MAGI income

That can produce a very different eligibility result. It’s also why we recommend reviewing Marketplace eligibility again when a new tax year begins, rather than assuming the previous year’s subsidy — or lack of one — will carry forward.

Do you have to take COBRA after your spouse dies?

Not necessarily. This is another area where families sometimes assume there’s only one option.

You may have been covered through your spouse’s employer-sponsored group health plan. After the employee dies, the surviving spouse may be offered COBRA continuation coverage. The problem is cost: COBRA can be extremely expensive, because you may suddenly become responsible for much more of the actual premium that the employer had previously been subsidizing.

Depending on the circumstances and the timing of the loss of employer-sponsored coverage, losing job-based coverage through a family member can qualify you for a Special Enrollment Period (SEP) to obtain Marketplace coverage outside the normal Open Enrollment window. That makes it worth comparing the options before automatically electing COBRA. Our answer page covers how long you have to get coverage after losing job-based insurance.

An illustration: a spouse dies in August

Let’s put the pieces together with a hypothetical couple, Mary and John.

John earned roughly $90,000 between January and August 2026. Mary earns roughly $10,000 annually. John passes away in August. Mary had health insurance through John’s employer and is offered COBRA, but the premium is far more than she can comfortably afford. After John’s death, Mary also begins receiving pension and Social Security survivor benefits.

When looking at Marketplace coverage for the remainder of 2026, Mary shouldn’t simply report $10,000 because that’s what she personally earns.

Same person. Same house. Two very different subsidy outcomes, one year apart.

What should you do if you lose health insurance after your spouse dies?

Don’t assume COBRA is your only option, and don’t assume your Marketplace subsidy will be based solely on what you’re earning today. Look at the whole situation:

1. What coverage are you losing, and exactly when does it end?
2. What was the household’s income earlier in the year?
3. What income will you receive for the rest of this year?
4. What will next year’s income realistically look like?
5. Are you eligible for a Special Enrollment Period?
6. How does Marketplace coverage actually compare with COBRA — premium, deductible, network, and your doctors?

Those questions produce very different answers from one family to another, which is exactly why a generic answer isn’t much help here.

Frequently asked questions

Does my deceased spouse’s income count for Marketplace health insurance? Generally, income your spouse received before death during the same tax year may still be included when determining annual household income. The IRS states that when a surviving spouse files a final joint return, the deceased spouse’s applicable income through the date of death and the surviving spouse’s income for the year are both included.

If my spouse died in August, do I count their January through August income? Generally, yes. You shouldn’t automatically remove income your spouse earned earlier in the year simply because they died before December 31.

Can I file jointly if my spouse died this year? Generally, yes — assuming you otherwise qualify and don’t remarry before the end of the year. The IRS considers a person married for the entire year for filing-status purposes when their spouse dies during that year.

Does Social Security count as income for ACA Marketplace subsidies? Marketplace MAGI includes both taxable and nontaxable Social Security benefits. SSI is different and isn’t included in Marketplace MAGI.

Do I have to take COBRA after my spouse dies? No. Depending on the circumstances, losing employer-sponsored coverage may create a Special Enrollment Period allowing you to enroll in Marketplace coverage. Compare your available options before deciding, because reversing the decision later is not always possible.

What happens to my Marketplace income calculation next year? The new year gets a new annual income estimate. A deceased spouse’s wages from the prior year aren’t added to the surviving spouse’s new-year income. You would instead project the income you expect for the new coverage year.

What if I estimated wrong? Marketplace subsidies are reconciled on your tax return, so an estimate that turns out too low can create a repayment. Our guide to tax reconciliation for Marketplace coverage explains how that works, and it’s worth understanding in a year when your income changes mid-stream.

Can Mere Benefits help me figure this out? Yes — on the health insurance side, including Marketplace coverage, Special Enrollment Periods, and alternatives to expensive COBRA. For questions about the tax treatment of income or filing status, you should also consult a qualified tax professional.

We can help you review your options

At Mere Benefits, we help individuals and families understand health insurance during major life transitions — including the death of a spouse and the loss of employer-sponsored coverage. Our job isn’t simply to show you a premium. It’s to help you understand how the pieces fit together so you can make an informed decision at a time when clear information is hard to come by.

If you’ve recently lost a spouse and are facing an expensive COBRA premium, we can help you determine what options may be available and compare them against the coverage you have now. You can also start by estimating your household income with our ACA Marketplace Income Estimator.

When you’re ready, reach out for a free, no-pressure review or call 904-654-5450. Kate Spilsbury (RSSA®, CMIP®) and the team are independent, licensed agents based in Jacksonville, serving Northeast Florida and Camden County, GA. There’s no rush and no obligation — and if the answer is that your current coverage is the right one to keep for now, we’ll tell you that.

Simply For Your Benefit.

Mere Benefits provides health insurance guidance and educational information. We do not provide tax or legal advice. When a situation involves the death of a spouse, estate income, filing status, or other complicated tax issues, we recommend confirming the appropriate tax treatment with a qualified tax professional. This article is educational and reflects rules current as of 2026; ACA figures and guidance change annually.