Income verification is the process the Marketplace uses to confirm the household income you reported on your application. Your estimate determines your subsidy, so the Marketplace checks it against IRS and Social Security data before finalizing your eligibility.
Most applications clear automatically. If the figure you entered differs meaningfully from what federal records show, you'll receive a Data Matching Inquiry (DMI) asking for documentation, usually within 90 days.
Documents that typically satisfy a request:
Missing the deadline matters. If you don't respond, the Marketplace can reduce or end your Premium Tax Credit, which means your monthly premium jumps to the full unsubsidized amount.
Income verification carries more weight starting with the 2026 tax year because caps on Advance Premium Tax Credit repayment were eliminated. If you underestimate your income and receive more credit than you were entitled to, you now repay the full excess to the IRS rather than a limited portion.
This is the hardest part of the process for anyone with variable income: freelancers, contractors, seasonal workers, and anyone whose earnings include commissions or investment gains. A conservative estimate plus prompt mid-year updates is the practical defense. If your income changes, report it to the Marketplace right away rather than waiting for tax season.
Contact the Marketplace before the deadline. They accept a range of documentation, and in some cases a signed self-attestation explaining your situation. Not responding at all is what causes subsidies to be reduced or terminated.
The Marketplace uses Modified Adjusted Gross Income (MAGI), not gross pay. For self-employed applicants, that means net income after allowable business deductions, which is often considerably lower than total revenue.
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