Provisional income
Certified Financial Planner glossary · Certified Financial Planner
Definition
MAGI plus tax-exempt interest plus 50% of Social Security benefits. Determines the 50% and 85% taxation tiers.
Provisional income in plain English
A retiree with municipal-bond interest assumes those tax-exempt coupons cannot drag Social Security into taxation. Provisional income is MAGI plus tax-exempt interest plus 50% of Social Security benefits, and that stack sets the 50% and 85% taxation tiers. Municipal-bond interest is included in provisional income, not excluded. If a stem treats munis as harmless for Social Security taxation, that is the noise answer. Build the provisional-income figure before guessing which tier applies.
Related Certified Financial Planner terms
Certified Financial Planner practice questions · Certified Financial Planner flashcards · Certified Financial Planner study guide