Updated October 18, 2026. Quick answer: Line 2a is your modified AGI and line 2b is the combined modified AGI of your dependents who must file their own return. Each is figured on a worksheet in the instructions, starting from numbers on the Form 1040. The two lines are added on line 3 to make household income.
Related reading on this site: IRS Publication 974.
What lines 2a and 2b ask for
The captions read “Modified AGI. Enter your modified AGI. See instructions” and “Enter the total of your dependents’ modified AGI. See instructions”. For line 2a the instructions say “Enter your modified AGI on line 2a. Use the worksheet next to figure your modified AGI using information from your tax return.”
What modified AGI means
The instructions define it: “For purposes of the PTC, modified AGI is the AGI on your tax return plus certain income that is not subject to tax (foreign earned income, tax-exempt interest, and the portion of social security benefits that is not taxable).” They name the tools: “Use Worksheet 1-1 and Worksheet 1-2 to determine your modified AGI.” Worksheet 1-1 is for line 2a and Worksheet 1-2 is for line 2b. The figures to carry into them are printed on the worksheets, so read them there. The AGI side is explained on the Form 1040 AGI page, and the difference between this number and the one used for Medicare surcharges is on the IRMAA and ACA MAGI page.
Line 2b: your dependents
The instructions say “Enter on line 2b the combined modified AGI for your dependents who are required to file an income tax return because their income meets the income tax return filing threshold.” They add “Do not include the modified AGI of dependents who are filing a tax return only to claim a refund of tax withheld or estimated tax.”
The same rule appears in the definition of household income: “Household income does not include the modified AGI of those individuals whom you claim as dependents and who are filing a 2025 return only to claim a refund of withheld income tax or estimated tax.”
A child’s income on your return
For a parent who reports a child’s interest and dividends, the instructions say “If you are filing Form 8814, Parents’ Election To Report Child’s Interest and Dividends, and the amount on Form 8814, line 4, is more than $1,350”, “you must include on line 1 of Worksheet 1-2 the sum of the tax-exempt interest from Form 8814, line 1b; the lesser of Form 8814, line 4 or line 5; and any nontaxable social security benefits your child received.”
Another case: “A taxpayer who includes the gross income of a dependent child on the taxpayer’s tax return must include on Worksheet 1-2 the child’s tax-exempt interest and the portion of the child’s social security benefits that is not taxable.”
Where the number comes from
Line 2a comes from Worksheet 1-1 and line 2b from Worksheet 1-2, both printed in the instructions and both built from entries on your Form 1040 and related forms. The family count that decides who your dependents are is on the line 1 page.
Where it goes next
The form’s caption for line 3 is “Household income. Add the amounts on lines 2a and 2b.” That step is on the lines 3 to 6 page. For the full form, see Form 8962.
Edition and line numbers
This page reads the 2025 Form 8962 and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are the files for the tax year 2025 return, filed in 2026. The form says “Attach to Form 1040, 1040-SR, or 1040-NR.” Check the tax year printed on the form you are filling in and use the line numbers on that year’s form, because a different year’s form can number or word its lines differently.
Common mistakes
- Entering plain AGI on line 2a. The instructions define modified AGI as “the AGI on your tax return plus certain income that is not subject to tax”.
- Adding a dependent who filed only for a refund. The instructions say “Do not include the modified AGI of dependents who are filing a tax return only to claim a refund of tax withheld or estimated tax.”
- Leaving out a child’s income reported on your own return. The instructions say “must include on Worksheet 1-2 the child’s tax-exempt interest and the portion of the child’s social security benefits that is not taxable.”
Related: Form 1040 AGI, IRMAA and ACA MAGI, Roth conversions and the ACA subsidy cliff, and Schedule 1.
Sources
- Instructions for Form 8962, Premium Tax Credit (PTC) (2025): https://www.irs.gov/pub/irs-pdf/i8962.pdf
- Form 8962, Premium Tax Credit (PTC) (2025): https://www.irs.gov/pub/irs-pdf/f8962.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.